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Banks, telco and consumer stocks may continue to do well next week

Post the telecom policy announcement, Reliance and Vodafone remain the top ideas and one can invest in that pack for a little bit longer horizon, says Rahul Shah, V-P, Equity Advisory, . Edited excerpts.


For the coming trading week, tell us what are the top three things that you will be tracking?
One, we have seen that the Nifty is roaring and it should continue to do well going forward. Importantly, the banking stocks which were underperforming for quite some time have started moving up. I think the clear winner will be the banking stocks that should continue to outperform next week as well. Obviously, PSU banks saw the smart run up in the last two days and I think it should continue to hold up. All your wholesale bankers like State Bank, Axis Bank, ICICI in the whole banking sector should rally next week as well.

Secondly, one should look at the AGR decision. I think Vodafone Idea is going to be the biggest beneficiary in this. I personally feel that there should be some more momentum gathering in it and from where the stock has moved up from the lows of sub Rs 6 levels and now Rs 11 odd levels, there could be some more upside in Vodafone Idea from here also.

Thirdly, the consumer pack. We saw in the beginning of this month a good number of consumer packs adding to the rally and it should continue to do well going forward. In my view, Marico is one of the top picks followed by HUL and ITC.

We saw a lot of stocks make a comeback that we have not been used to. Is the momentum again no longer with broader markets and are we again going to shift far more heavily towards frontline indices?
Interestingly, we started this month with the broader indices. Few heavyweights moved the indices and there was movement in midcaps and largecaps. The rally still continued in the broader indices. We saw some profit booking in a lot of pockets in the last few days as well. I still feel broader markets should continue to do well and obviously the heavyweights have been the outperformers but somewhere or the other, they will take a breather going forward; so the rally should be more broad based.

Fundamentally, if you look at the banking universe, we saw participation from everyone rather than only one or two HDFC twins or something. So I think it should not be polarised to a few stocks, but this rally will fierce into the entire broader perspective.

For investors who are looking to invest in the market from a more longer term perspective, what would you recommend?
One is obviously the metal space. We have seen some pause in steel stocks in the last couple of months. JSW Steel and Tata Steel remain at the top of my mind for the investors for the next couple of quarters. Secondly, post the telecom policy announcement that we got this week, Reliance and Vodafone remain the top ideas and one can invest in that pack for a little bit longer horizon.


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