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Sell stocks from these sectors now

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May 16, 2006 18:52 IST

Which are the sectors that one must exit right now? Experts give the answers to Moneycontrol.

Sanjay Dutt of Quantum Securities says that one needs to move out of sectors where there is a lot of froth.

He says, "The key thing to look here is sectors which are overbought. Wherever there is froth right now, that is the place where there will be maximum pain. Whether it is in the F&O segment or non F&O, cash market or capital market, where there was a lot of froth and speculation those are sectors which one needs to get out of and take profits."

He adds that, one must turn to cash in those particular sectors and move into defensive plays.

DD Sharma of Anand Rathi Securities says one must move out of metals and autos.

He says, "If one wants to remain invested then I think the best strategy would be to get out of the momentum stocks like metals or auto and switch to sectors, which are steady, such as banking. They will have lesser chance of further depreciation."

He adds that going forward, the banking stocks could recover well since whatever negative or higher provisioning led to reduced profits for the banking sector that will not happen in 2007-2008 and therefore the profit growth in the banking sector will be variable.

Sumeet Rohra of Antique Stock Broking cautions against metals, he would like to stay away from them because the LME commodities are down to close 4-5%.

"There seems to quiet amount of uncertainty at least in that sector. That is one sector which I would like to clearly refrain from. Metals are uncertain. Incase if it bounces back, use that to exit your position rather than to add," says Rohra.


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