Froth accumulating in small-cap stocks: Analysts

New Delhi: There is froth in the small-cap segment, which is driven by momentum, says VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The market has turned excessively volatile responding to fast changing incoming data. DIIs have been consistent buyers on the back of good flows to domestic mutual funds. But FIIs have been consistently selling in the cash market this month with a net sell figure of Rs7,850 crore, he added.

The FII selling has been triggered by the rising US bond yields and the strengthening dollar. With the yield from the US 10-year at 4.29 per cent and 2-year at 5 per cent, the FIIs are likely to sell further impacting market sentiments, he said.