Stay light ahead of the elections; defence, engineering, railways, infra look overvalued, says Jimeet Modi of SAMCO

livemint.com:

Jimeet Modi, founder and CEO of SAMCO Group expects high volatility ahead of the General Elections. He says Investors must stay light ahead of the election and may even consider diversifying their portfolios into other assets like gold and debt. In an interview with Mint, Modi said there are pockets of overvaluation in defence, engineering, railways and infrastructure segments while defensives like pharma and FMCG sectors offer considerable safety in terms of volatility.

Edited excerpts: In the wake of major events already priced in and markets expecting announcements of dates for General Elections any time soon, the volatility is expected to be the order of the day at the market. Indian markets are likely to trade range bound for the next few days and Nifty may move from 21,500 to 22,200. A clear trend will emerge only after the market breaks out on either side of this range.

One can maintain a stock-specific approach and pick stocks that have delivered good quarterly numbers in the current earnings season. Contrarian investors can look for opportunities in private banking stocks which have not participated in the rally so far. Also Read: Nifty 50 may deliver returns ranging from 12-18% over the next year, says Manish Goel of Research & Ranking As mentioned earlier, we expect the volatility to shoot up with the announcement of the dates of the General Election.