Railway, PSU, and IT stocks most vulnerable to market downturns, warn experts. Here's what they recommend instead
PSU stocks, and other export-oriented industries. They attribute potential declines to stretched valuations, a looming economic crisis in the US, reverse yen carry trades, and geopolitical flare-ups.
In the past week, global markets have experienced a significant sell-off due to disappointing economic data from the US, the Bank of Japan's unexpected 25 bps rate hike, and the assassination of Hamas Political Bureau chief Ismail Haniyeh in Tehran.
«Select pockets of the market may witness selling pressure, with themes such as power, railways, and capital goods likely to remain vulnerable due to concerns over their valuation,» Manish Chowdhury, Head of Research at StoxBox said.
Ajit Mishra, Senior Vice President of Research at Religare Broking, anticipates pressure spreading across most sectors. He particularly views IT and other export-oriented stocks as vulnerable to market corrections and does not rule out a potential decline of 5-8% from current levels.
Railway stocks have been hit hard after experiencing multibagger rallies over several quarters. Companies such as RailTel Corporation, Indian Railway Finance Corporation (IRFC), Rail Vikas Nigam Limited (RVNL), Ircon International, Titagarh Rail Systems, and Jupiter Wagons have seen declines ranging from 5% to 25% over the past month.
Similarly, PSU stocks have faced investor backlash, with the BSE PSU index falling over 5% in the past week. Despite this recent decline, the index has delivered a return of 89% over the past year.
All levels refer to Thursday's
