Cyclicals look ultra-cheap versus defensives: Ridham Desai

Here are experts equity calls for the day on how the markets are expected to trade:

Ridham Desai, Morgan Stanley: Correlation of stocks with the Sensex has continued to decline since their January peak, warranting wider sector positions. Cyclicals look ultra-cheap versus defensives, supported by a likely trough in earnings growth. We continue to widen our sector positions and add to cyclicals. We have increased financials and industrials by 100 bps and reduced utilities by 200 bps. We have replaced Jain Irrigation and HDFC with IDFC and L&T in our Focus List.

Michael Kurtz, Nomura: Despite lacklustre earnings globally, improving economic data holds promise of an upturn in forward EPS expectations. The extreme risk premia embedded in global stocks could decline as critical political uncertainties in the US and China are cleared in the next 2 weeks. In India, Dr Reddy's is a play on patent expiry in US and should benefit from its own product filings and API supply.