Mkt consolidating post huge upmove

Everybody from Delhi has made a specific reference to the export sector, sops for it, relief for it:

It has to happen because that is the only part of the economy which is not improving. If you look at the index of industrial production (IIP) numbers, infrastructure core sector, auto sales, they have all improved over the last three months but exports are still falling every month at the rate of more than 30%.

Things are not improving overseas, you look at the euro zone, ECB yesterday was talking about 5.1% shrinkage of the euro zone gross domestic product (GDP) for the full year. So in the West things are not improving and that pays which is why exports are hurting. Therefore the first thing which they will try and address for the economy is probably the export sector. So all of these things are very well come, the interest subvention, lower cost of credit, extension of the packages, which are already on etc and of course some direct stimulus.

From a stock market point of view, some of these textile stocks have been the obvious beneficiaries of these expectations. So Alok Industries , Arvind , Gokaldas Export etc have been moving up and they may well continue their rally. You want to focus on some of the other smaller areas like gems and jewellery where maybe stocks like Su-Raj Diamonds and Vaibhav Gems , which have also moved a bit, can start moving up. You have got specific leather plays like Crew Boss, you have got some off center plays like Karuturi, you have got some of the rice exporters like KRBL , Lakshmi Energy & Foods (formerly Lakshmi Overseas), REI Agro , so these are the kind of stocks. I doubt whether auto ancillaries per se the markets will lap up in a big way because that sector tends to be - I don't think stimulus per se will do a whole lot for that sector. Bharat Forge's of the world are too big to move because of some small interest subvention or rate of credit etc.

So I think you focus on the smaller ones. Textiles, gems and jewellery, probably some of the rice exporters, leather exporters. There are a clutch of 10-15 stocks which will probably be beneficiaries at least sentimentally from the Budget speech. So that is not a bad place to position yourself. Though keep in mind that some of them like textiles have run quite a bit already.