The week saw the long best the shorts. After a spell of selling, FII’s turned buyers of Indian equity again. While the reasons behind their change of heart are not clear, only sustained buying by them can turn the trade into a trend. While it will take a few weeks to know the mood of the FIIs, this week was a great relief.

The persistent gloom and overdone pessimism seems to be clearly ebbing and we can hope to see better days in sentiment. If there is sustained buying by FIIs it is certain to confuse the domestic fund managers. The past year has seen intense concentration in domestic buying and a distinct polarity of investment approaches practised by most Indian fund managers. The few contrarians have had a rough time due to this concentrated approach becoming institutionalised at the hands of a few large mutual funds.

It will be interesting to see how both sides stack up against each other and against the benchmark if there is a clear trend reversal in our markets. For the retail investor, it is a time to prepare their portfolios for 2020 and beyond. The present sentiment must not bother much and this is a time to think beyond the present. Rarely do we get the opportunity to play a recovery with such headroom. The time for Helicopter investing is probably coming to an end and ground-up change in portfolios is looking inevitable.

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