Shankar Sharma, in his interview in ET, exuded great confidence that “India was rocking“. He said that the change in the Finance Minister from Pranab Mukherjee to P. Chidambaram was a good thing because the RBI Governor appeared to have a better equation with Chidu than with Pranab. One could expect interest rate cuts.
Another reason for interest rate cuts was the slowing economy. The consequence of this would be a “deluge of foreign capital flowing into India” Shankar said.
The first sector to benefit from the rate cuts would be the Banks and Autos and so investors should position themselves there, Shankar Sharma said. He named his favourite stocks, SBI, IndusInd, Bajaj Auto and Tata Motors as the stocks to be bought by investors.
On the sector front, Shankar’s favourites were Infra and capital goods stocks like L&T, BHEL & Jaypee and the cement stocks.
What investors should not buy are metal stocks like Tata Steel, Sterlite, Hindalco, JSWL etc, Telecom & power utilities stocks like NTPC, he emphasized.