Jefferies' Chris Wood bullish on contract manufacturing, traditional energy stocks

The market veteran pointed out that he missed the rally in defence stocks

Suggesting that the bull market is not drawing to a close anytime soon, Jefferies' Global Equity Strategist, Chris Wood has his eyes set on a couple of sectors that could rally in the coming quarters.

In an exclusive conversation with CNBC-TV18, the market veteran first pointed out that he missed the rally in defence stocks and said that the 'problem with Indian markets is what not to own', referring to the sharp rally in almost all sectors. "Maybe if defence stocks correct, that will be an opportunity to enter, " he added.

Budget 2024 News LIVE: Industry status, tax rebate on housing loan interest on real estate sector's wishlist for FM Sitharaman

When asked about choosing between renewable energy and traditional fossil fuel companies, Wood said that fossil fuels will be around for a long time and believes in the resilience of traditional energy stocks.

Also read: Budget 2024: EV Industry counts on incentives, tax rationalisation and funds for infrastructure to reignite volumes

Apart from that, another emerging area which is gaining investor attention is the contract manufacturing sector, also known as electronic manufacturing services.

Read: Chris Wood calls India rally best in the world, bull run not over but watch this risk

As the Union Budget inches closer, Chris Wood also touched upon why having no capital gains tax could be beneficial for India. He highlighted its potentially greater impact on the market compared to previous events like post-election fluctuations. While there's a slim possibility of such hikes, easing immediate market concerns, an increase would shift the risk-reward dynamics for stock investors.

Drawing on global examples, Wood pointed to markets such as Hong Kong, which do not levy capital gains tax. He suggested that a similar policy could stimulate investment and foster market growth by removing this financial barrier.