The market has presented a "beautiful" opportunity ahead of the holiday season for investors should book profits and prune portfolio, according to Ajay Srivastava, managing director at Dimension Consulting Inc.
Srivastava advised investors to refrain from taking long positions at this point of time. They should evaluate their portfolio and see which segment has performed better or lagged, and prune the portfolio accordingly, he told NDTV Profit in an interview. "This is a kind of market that gives you opportunity to get out of ugly stocks."
The caution from Srivastava comes as the benchmark NSE Nifty 50 has surged 6.38% so far this month on optimism that interest rates have peaked in the U.S. and that government spending will grow in India ahead of the general election, boosting corporate earnings. Broader markets have outperformed.
Mid caps are likely to outperform large-cap peers due to large volume in the segment, according to him. Capex of mid caps has delivered 'phenomenal' growth, he said.
Srivastava also suggests keeping a close eye on government policies, given the recent push and pull that occurred in sugar company stocks.
For short-term perspective, he advised investing in debt. He suggests no change in the long-term portfolio.
Key Takeaways
Among sectoral picks, Srivastava said IT stocks have returned persistent gains.
He cautioned about stocks that have gained without fundamental reasons.
Keep an eye sectors such metals and oil refining that are sensitive to government policy.
He cautioned about the pharma sector as it tends to give returns once in five years.
For portfolio evaluation, Srivastava suggested to keep a timeframe in mind.
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