Results of the top IT companies are out and an expectation reset has happened. The market seems to be quite satisfied with the performance and guidance. The coming weeks will see the NIFTY constituent sectors come out with results.

Financials will be the big one. The markets are seeing persistent FII selling in the private financials and are also witnessing a sectoral rotation coming from domestic institutions. Budget expectations are gradually forming and will begin to show in the coming weeks.

The most buoyant side of the market is the small caps, where retail activity is at an all-time high. The markets are in a mixed phase with visible pockets of super-optimism, optimism, caution and pessimism. Investors need to decide which among these four pockets suits their risk appetite and position their portfolio so that it is future-facing. This will call for taking money out of super optimistic pockets and distributing it into others pockets.

Each investor is likely to do it differently in line with his own perception of risk and valuations. There is no escaping from this shift. Investors should prepare in the coming weeks to complete this positional shift in their portfolio.

The time to act is now.

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