The benchmark indices Sensex and Nifty are all set to bid adieu to Samvat 2072 with gains of over 11 per cent fighting high volatility throughout the year. This year, the Muhurat Trading is scheduled to take place on October 30 and, as always, all trades held during the Muhurat session will result in settlement obligations.
As you gear up to rehash your portfolio on the auspicious occasion of Diwali, in consultation with the experts, we have compiled six sectors where you should book profits and exit before Samvat 2073 begins.
"We recommend investors to carefully select the companies in which they invest and exit only when the companies, which they are invested in, show signs of weakness either in business model implying lower returns on invested capital or in the management quality," said Amit Nigam, Head - Equities, Peerless Funds Management Company.
- IT sector: IT sector has been underperforming for a couple of quarters now. Rohit Gadia, CEO, CapitalVia Global Research believes the sector is in strong downtrend. Abnish Kumar Sudhanshu, Director & Research Head, Amrapali Aadya Trading & Investments also advised investors to exit IT sector for short to medium term as prevailing global uncertainties such as Brexit will result in holdbacks in discretionary spending.
- Private Banking: Off-late, the stock prices of private lenders have been surging against the PSU banks. Hence, prices have gained at the cost of PSU Banks. Sudhanshu of Amrapali Aadya Trading said: "now all the NPA issues will be gradually washed out and demand for the PSUs would be high compared to private, hence profit taking is bound to happen."
- Consumer goods: On the back of consumer driven themes, this sector has witnessed huge demand so as stocks. "The companies present in the FMCG sector have become rich in valuation which is not justifying the stock price. So we are expecting profit taking in this counter," said the expert.
- Metal: "We don't see any significant pick-up of demand in the metal sector in the short to medium term. With supply at the current level, chances of metal prices to rally has become quite less," said Gadia of CapitalVia Global Research.
- Tyre: Over the period of time, tyre companies have taken great advantages of declining rubber prices. Since a year, tyre companies' stock prices have been souring and now we are seeing rubber prices inching up gradually. Hence, this counter can witness profit taking.
- OEMs: Over the period of time, OEMs have remained beneficiary of falling crude prices but now experts expect fuel prices to either remain at the same level or move upwards. Further upside in the crude price does not paint a good picture for the stocks present in the same sector.