Indian Stock Market at record highs. Sectors and stocks that experts are betting on

As the Indian Stock Markets scaled record highs for the second day in a row and post state election result rally continued on Tuesday, experts are betting on domestic focused sectors and stocks.

The  strong domestic growth has remained supportive for resilience in the Indian stock markets despite global slowdown fears. The confidence on India’s GDP growth has been a key reason that has driven FPI (Foreign Portfolio Investor) investments into India.  With the favorable verdict in the state elections the political stability in the country is likely continue. This is vital for the country's growth prospects. 

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In fact experts as as Jitendra Gohil, Chief Investment Officer, Kotak Alternate Asset Managers now believe that market is still underestimating India's GDP growth 

Gohila thereby said that we continue to favour domestically focused cyclical and interest rate-sensitive sectors for the next twelve months. We expect PSU banks and PSU stocks (power, energy, defence, cap goods, NBFCs, etc) to experience further upside and the stocks could re-rate further. We are particularly positive on the banking and financial sector, real estate, and cement.

Even other experts share similar views. 

"Given the government’s focus approach towards long-term capex across key areas, we expect BFSI (Banking, Financial Services, Insurance), Industrials, Real Estate, Auto and Consumer Discretionary to do well going forward" said Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services.

MOFSL largely maintains its sectoral allocations and weights, relying on the sectors that have shown growth potential to drive our stock selection framework. They remain Overweight on Financials, Consumption, Industrials, Automobiles, and Healthcare; while they maintain underweight stance on Metals, Energy, IT and Utilities, and Neutral outlook on Telecom in their model portfolio

As per MOFSL strategy report their Top ideas in the large caps include ICICI Bank, ITC , Bajaj Finance, Larsen & Toubro Ltd,, HCL Technologies Ltd, Mahindra & Mahindra, Titan, Avenue Supermarts, Ultratech Cement, ONGC, and Zomato. 

The key midcaps and Smallcaps picks include Indian Hotels, Angel One, Lemon Tree Hotel, Ashok Leyland, Godrej Properties, Sunteck Realty, Metro Brands, Global Health, PNB Housing, and Craftsman Auto.

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Within export-driven sectors, chemicals appear to have bottomed out, and a recovery may become visible in the next few quarters,, this consolidation offers attractive buying opportunities, said Gohila. We maintain our positive view on the pharma sector, which is likely to remain well-supported by lower pricing pressure in the USA and robust growth in the domestic market, added Gohila However, Gohila anticipates potential near-term underperformance in the FMCG sector."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions