What are ING Vysya's safe plays in this stock-specific mkt

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Terming the market strictly stock- and sector-specific, AS Harish of ING Vysya Bank  talks about his top picks.Being overweight on auto, infrastructure, power, FMCG, capital goods and IT, he says the trend is expected to continue. He also feels that sectors including consumer durables and banking have been performing brilliantly.

Harish is however bearish on the telecom space.

Below is a verbatim transcript of his interview with CNBC-TV18's Anuj Singhal and Latha Venkatesh. Also watch the accompanying video.

Q: What is your view on the markets now? We are at 5,623, comfortably sitting at almost three year highs. How would you position yourself now?

A: The markets have been moving in a range in the last one year and it is looking attractive based on 2012 earnings and based on that, it is fairly valued. If you look at the market since January, it has not done much, it has just moved up by about 7-8%.

If you look at some of the sectors, it has done very well. For example the sectors like the consumer durables, the banking, the FMCG, auto these sectors are doing exceedingly well and have moved up by about 20-25%. Even for example, the smallcap and the midcap segments have moved up by around 20-22% as compared to the overall market have moved up by about 8%.

In this market, the focus should be more on the stock and the sector specific. Even going forward, there are four important triggers in the market-one is that we don't expect the interest rates to go up globally, that is one important trigger and second trigger is that we do expect agriculture to do very well in this particular year.

For example agriculture is expected to grow at about 4-5% in this year and we do expect the inflation to come off and the fiscal deficit to gross domestic product (GDP) should be under control. These are the four important triggers for the market going forward.

Q: If you were to churn your portfolio now, what would be the sectors you would avoid and more importantly what would you hop onto?

A: We are overweight on the auto, FMCG, capital goods and IT and we continue that. For example, there are some sectors that have not done well, be it metals, telecom and all these sectors, I don't want to look at the contrarian approach and go overweight on those sectors. For example, the ones which are doing very well as of now and we do expect the trend to continue for some more time is banking. It has been doing very well and we are overweight on that.

Q: Would you recommend that those who have not got exposure to midcap should start now or do you think you would now get extremely wary of the way in which the midcap has rallied and so this may not be a time to enter?

A: The midcap segment has been doing very well in the last one year. For example, the sector like midcap agriculture sector has done very well in the last one month. Even in the last one week we are seeing so much action in that sector. We are still positive on that. Even IT-some of the unique companies in KPO, BPO and the infrastructure management services are looking good. The focus should be on the stock and the sector specific.

Q: Your best performance is in the ING Contra Fund and you are saying you don't want to go Contra now?

A: ING investment management is different and ING private banking is different. Same group but different. I am not part of that fund.

Q: What about telecom? Here even Contra would be quite interesting because we have seen that the street is equally divided on whether the worst is over and how the stock prices will move within telecom. We have seen different set of moves like Bharti has seen 40% rally while RelCom is down. What is your sense of how this space is going to pan out?

A: We are underweight on the sector currently. Today it is more of a value buy in that one. Probably if it corrects some more, we may increase the exposure there. As of now we are underweight on that.

Q: Would you go overweight on infrastructure? The recent development of the Supreme Court holding up land acquisition in the old Taj corridor, the highway project in Uttar Pradesh, would you think that it is a fairly turning point and that would make you bullish on infrastructure specially road companies?

A: Definitely. The entire infrastructure space, we are quite positive starting from the capital goods, the power sector, the banking and we are positive on that sector. For example in the last one year some of the sectors have not done well but going forward we are positive on that. I do expect the second half should do very well especially for infrastructure segment.