Mumbai: Indian stock markets are likely be volatile in the first half of 2019 with a host of domestic and international factors, including 2019 general elections, concerns of global economic slowdown and uncertainty in US-China trade relations. The volatility in the first few months of the year will give a chance to build the portfolio over the next two quarters to generate higher double digit returns over the next few years, said Vikas Jain, senior research analyst, Reliance Securities Ltd. In 2018, the NSE Nifty gained 3.13%, while the Sensex rose nearly 6% to post their fourth yearly gain in five.

“We believe as the macro concerns have eased with lower crude oil prices, inflation particularly CPI at multi month lows and stable rupee with softer bond yields, it warrants for an interest rate reversal in CY19 from current levels," said Jain. He noted manufacturing sectors like capital goods, auto and metals are very positive from current levels.

Volatility has increased a lot over the past few weeks on back of global volatility and it would start inching upwards from the middle of the February with respect to the interim budget and during the time of general elections in the first half, he added.

Read: Motilal Oswal’s 10 stock picks for 2019

In pharma sector, Sun Pharma, Cadila Healthcare and Natco Pharma are among Reliance Securities top picks for 2019. In banking and financial sector, Reliance Securities likes HDFC, ICICI Pru Life, Aditya Birla Capital, Kotak Bank and IDFC Bank.

Jain has recommended a portfolio that is expected to give a return of 15% to 25% in the next one year till December 31, 2019.

AUTO

Tata Motors        5.00%

Bajaj-Auto         5.00%

Motherson Sumi    5.00%

PHARMA

Sun Pharma        5.00%

Cadila Healthcare   5.00%

Natco Pharma      5.00%

BFSI

HDFC Ltd          7.50%

ICICI Pru Life       7.50%

Aditya Birla Capital  5.00%

Kotak Bank        5.00%

IDFC Bank         5.00%

METALS

Vedanta           7.50%

National Aluminium 7.50%

CAPITAL GOODS/POWER

Cummins          5.00%

Bharat Electronics  5.00%

Power Grid        5.00%

CASH             10%

Total             100%

Disclaimer: Livemint.com advises readers to check with experts before taking any investment decisions.

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