Return expectations need to be toned down this year and one will have to be really choosy in stock selection.

Some of the money the domestic mutual funds have raised will also come into the market now. That’s one reason why the market refuses to go down.

The market outlook broadly remains positive as the Indian growth story is still intact. But valuations are not as sanguine as last year.

An optimistic outlook for the economy indicates a robust demand for funds, increasing the pricing power of the banks.