Retail investors are continuing to drive the Indian stock market higher, while foreign institutional investors (FIIs) still remain cautious, according to market expert Sharmila Joshi. She said mid-cap stocks, especially lesser-known companies, have performed better than larger names in the recent market recovery.
Joshi noted that retail investors are putting more money into high-risk and high-beta stocks, which has helped smaller companies outperform. However, she believes this trend could continue only until there is more certainty in the market and FIIs return with stronger buying interest.
Speaking about auto stocks, she said the two-wheeler space continues to look strong. While companies like Bajaj Auto and TVS Motor remain solid players, Joshi currently prefers Hero Motors from a valuation point of view. She said the company appears to be getting its strategy back on track.
She also praised Mahindra & Mahindra for its strong numbers and growing electric vehicle lineup.
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