New Delhi, Nov 10 : The mid and small-cap rally is partly driven by retail exuberance and since the valuations in this broader market are high, investors have to exercise some caution, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The 8-day winning streak in S&P 500 was halted by a slightly hawkish statement from the Fed chief Jerome Powell that 'the Fed will not hesitate to tighten policy if needed.' The lingering concern that 'the rates may remain higher for longer' will continue as a headwind for stock markets for some time, but is unlikely to drag it down meaningfully, he said. The Indian market texture indicates that the 'buy on dips' strategy will continue to work. In Samvat 2080, Financials are likely to do well supported by attractive valuations and impressive growth. Sustained FII selling in financials, which is impacting the sector, will be only temporary. For investors with a 2-year time horizon, the leading private banks and 3 or 4 PSU banks are good buys with good return potential, he said. BSE Sensex is down 135 points at 64,697 on Friday. M&M is the top loser down by more than 2 per cent. Titan and HCL Tech are down 1 per cent. /IANS