Over the past week, the rally in PSU stocks has cooled off significantly, with the BSE PSU index sliding nearly 4%. Meanwhile, defensive sectors have gained momentum, with the BSE FMCG and BSE Healthcare indices rising around 2%.
Pharma and consumer goods sectors are witnessing optimism, driven by recovering rural demand and strong domestic growth. On top of that, reasonable valuations and earnings visibility for these sectors are bringing the defensive play back in focus.
The gainers and losers during between June 3-11 from the BSE 500 universe show the momentum moving away from the so-called ‘Modi stocks.’ The leaders of the latest market rally are stocks that hadn’t performed well in the run-up to the elections.
The company’s thermal power plant utilisation levels increased to 77.8 percent in the first half of FY22, levels last seen in the first half of FY18
The IT sector offers a good defensive play in the current scenario
Mukherjee says a better approach to start cashing out in sectors where the rally has not been driven by fundamental factors, and invest in quality defensive stocks. He is positive on the IT sector after the healthy earnings performance by Accenture
John Woods of Citi Private Bank told CNBC-TV18 that the market will continue to witness selling activity for a while but it will not be considerable. But the downside would be limited, he added.
With macro economic data from around the globe starting to improve, Sakthi Siva of Credit Suisse Asia Pacific believes it is time investors move out of defensives and start betting on cyclical stocks.
Amid all the challenges facing the markets — Greece, Facebook, JPMorgan — investors face an even larger potential problem: They soon could be running out of traditional safe havens for their money.
S Narain, chief investment officer of ICICI Prudential tells moneycontrol.com that the gloom in Indian equities is driven only by the negative news flow from Europe. “In fact, barring a few defensives, the Indian market is very attractively priced for investors now,” he says.
A storm gathers over equities markets. Investors getting overconfident, say experts