IT stocks drag Sensex lower

The market is likely to move into a consolidation phase as the Christmas holidays and the New Year approach, says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

A period of consolidation after the sharp run up of the last two weeks is also desirable since it will make the market healthy, he said.

Instead of rushing to buy, investors can adopt a strategy of buy on dips. It would be risky to chase the overvalued mid and small caps which have run up too much, too fast, on retail investor exuberance. Investors can buy high quality large caps on dips, he said.

Another pocket of safety is PSU banks which are attractively valued.

The next bout of buying by institutions is likely to begin in the early days of the New Year, he added.

BSE Sensex is down 45 points at 71271 points. IT stocks are down with Wipro, TCS, HCL Tech, Infosys, Tech Mahindra down more than 1 per cent in trade.