Looking for trading tips amid volatility? 4 buy ideas for Dalal Street in March

Volatility is likely to be the theme for Dalal Street in March as well given the global economic risks, rising bond yields, and a firm dollar.

In February, barring the fast moving consumer goods stocks, all other sectors gave negative returns. The worst hit sectors were realty, infrastructure, metals, power and utilities, with these sectoral indices falling 5-19% on the BSE.

Despite this, there are certain pockets of opportunities and sectors that experts believe can be added to the shopping list by investors in March.

Sectors to outperform
Top in the list are public sector banks. After a strong run-up in 2022, with some of them even turning multibaggers, stocks of public sector banks have corrected since the beginning of the year.

“The sector corrected close to 12% in February which has brought ~90% of the stocks to the oversold region warranting a pull back. Also, 90% of the stocks in the PSU bank segment are still trading above the 200-DMA hinting at the underlying strength,” said Anand James, chief market strategist at Geojit Financial Services.

The next sector that analysts are bullish on is infrastructure.

“Infrastructure continues to be the hot sector for investors. While we saw FPIs selling

Indian equities in February, they were positive on the infrastructure theme amid the government’s sustained capex push,” said Anmol Das, head of research at Teji Mandi.

Besides infrastructure, Das is also bullish on cooling products makers given that summer is expected to be hotter and this could drive demand for air conditioners.

“One can expect the cooling (AC manufacturers) stocks to remain in focus after the weather office forecasts heat waves as the hottest since February 1901 and summer has come earlier than usual,” he said.

Meanwhile, James expects a pullback in the utilities and capital goods sectors.

“This (Utilities) sector has been in doldrums majorly due to the Adani group stocks which forms 55% of the BSE Utilities index. Close to 60% of the stocks are either trading near or in the oversold region favoring a pull attempt in the near term,” he said.

Sectors to underperform
Most analysts are bearish on the oil and gas pack after the steep correction last month.

“The oil index has broken below the rising trendline support in the monthly time frame...60% of the stocks are having their 14D RSI above 50, hinting at more weakness to creep in the near term,” James said.

Manojh Vayalar of Religare Broking is also bearish on the pack and expects it to underperform in the near term.

Analysts don’t see a rosy picture for the metal and realty pack either.

“Sectors such as metals, real-estate could remain under pressure after the heavy bout of selling witnessed in February. However, these sectors being beaten down, could also witness a pullback from their recent February lows,” said Aamar Deo Singh, head advisory at Angel One.

(Data inputs from Ritesh Presswala)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)