New Delhi, Nov 20 (IANS): Retail investor exuberance is pushing up the broader market. Investors should not be blinded by the recency bias and chase small caps running away without fundamental support, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Inspite of recent underperformance, safety is now in large caps. Since FIIs turned buyers in the cash market on two days recently, they are unlikely to sell big and may again buy on favourable developments, he said.

There is momentum in large-cap IT stocks. The expectation that US will not tip into a sharp recession has improved the prospects for IT. Autos, telecom, capital goods and construction-related segments are likely to remain resilient. Banking stocks bouncing back is only a matter of time, he said.

"The ongoing rally in the mother market US triggered by declining bond yields makes the market construct slightly favourable for the continuation of the rally in India," he added.

BSE Sensex is trading down 25 points at 65,769 points on Monday.

M&M is top loser down more than 2 per cent.