That was the 16th straight day of net purchases by Foreign Institutional Investors (FIIs). In fact, India is amongst the top recipient of foreign money through FIIs (year to date) after Hungary.

With global fund managers flush with funds and sitting on huge amounts of cash, it's possible that there could be a further rally in the markets next week.

And, the ingredients for a rally are there. First, the current account deficit has fallen dramatically pushing the rupee higher against the dollar. The rupee gaining against the dollar is viewed favourably by FIIs, which is one reason they have pumped money in the last few trading sessions.

Secondly, all opinion polls point to sizeable gains for the Narendra Modi led government at the centre, which has raised hopes of economic growth. FIIs have now started dumping IT and Pharma stocks in favour of banking, infra and capital good stocks.

The trend is likely to continue on hopes of a Narendra modi led government pushing through economic growth. On the other hand gains in the rupee does not augur well for sectors like IT and Pharma, which are largely export oriented.

Banking stocks are set to rally even further, as FIIs on Friday were reported to be heavy buyers in private sector banking names.

Clearly, the market rally will continue and for a change it maybe without the participation of IT and Pharma. Get prepared for more volatility in the next few weeks ahead of the elections.

GoodReturns.in