Anil Manghnani, director at Modern Shares & Stock Brokers told NDTV Profit that markets may now see another top in 2013, so investors should hedge their bets in favour of high beta stocks.
Outlook on markets: India is the only country where we had higher interest rates, while the entire world was easing. Higher rates are associated with strong currency, but that has not happened in India. Markets are in a phase last seen in 1996, when there was a rally in the first half followed by a selloff. Markets should make a top in mid-2013.
Investment strategy: If you play for a top in next year June or July, you need to buy on every fall because timing the market is difficult. The Nifty may go to 6,300 next year, so buy high beta and sell defensives. Sell defensives on rally and buy high beta on falls.
Sectors to buy: Power, capital goods, power, realty.
Sectors to avoid: FMCG, consumer durables
Stocks to buy:
1) DLF: The stock keeps bouncing from the 170 levels. The upside could be 300, if markets go up to 6,300.
2) REC, PFC, and Reliance Power: These stocks have rallied, but can buy on pullbacks.
3) Banks: The banking index has rallied, so wait for a pullback; can buy OBC.