Disappointed with your portfolio in first half of 2022? Here are sectors to bet on

Domestic equity markets have witnessed a sharp correction in the first half of the ongoing calendar. Benchmark indices BSE Sensex and Nifty50 have dropped more than 10 per cent between January and June 2022.

However, the fall in BSE midcap index has been steeper. The second rung counter has plunged about 13 per cent, whereas BSE smallcap index has tanked over 16 per cent on a year to date basis till June 28.

The latest round of correction in equities has spooked the investors as markets have failed to show sustainable recovery. Despite some skepticism, market experts are advising investors to strategically buy the dips and allocate funds in select sectors.

In bad times, no sector can remain insulated for long. A lot would depend on the ownership patterns in stocks and their visibility on revenue and profits, said Deepak Jasani, Head of Retail Research, HDFC Securities.

"While optically some stocks or sectors may look attractive, any further selloff may make them even cheaper or selloff in other sectors may make that sector more attractive," he added.

Religare Broking said, "high inflation impacts all, either directly or indirectly. So we won’t say that in any space correction was unwarranted. We would like to adopt a stock-specific approach."

Here’s what top brokerages recommend in terms of fund allocate for the second half:

Yesha Shah, Head of Equity Research, Samco Securities
Selectively in the IT, banking and consumer space, valuations have become attractive.

Roop Bhootra - CEO, Investment Services, Anand Rathi Shares and Stock Brokers
One could look at sectors like manufacturing, banks, specialty chemicals and also IT where risk reward has become more favourable.

Pankaj Pandey, Head – Research, ICICIdirect
Among sectors looking better are – banks, auto, capital goods and power, retail and hospitality.

Vinit Bolinjkar, Head of Research, Ventura Securities
We believe that private sector banks can be accumulated although they have not seen big corrections. In the discretionary space, if one is able to take a long term view, market leaders like Asian Paints, Titan and Kajaria can be accumulated.

Nishit Master, Portfolio Manager, Axis Securities
Banks is one sector where we strongly feel that the selloff has been unwarranted and risk-reward is not extremely attractive. Auto and agricultural inputs are another sector where we feel risk-reward is attractive.

Shiv Chanani, Head of Research, Elara Securities India
BFSI sector has seen meaningful correction in valuations and now they are close to the lower end of 10-year trading range. We also like consumer discretionary space and capital goods are a sector which is attractively poised to benefit from the manufacturing renaissance in India following the PLI scheme.


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