What should you buy if the market falls further? Anand Tandon answers

economictimes.indiatimes.com:

Anand Tandon, Independent Analyst, says “most of the companies like the capital goods sector and the government-related, defence, engineering and railways, etc., are over-owned and overpriced. We are likely to see good moves down there. But if they give sharp downward moves, we may want to look at them again because there is a definite upside in terms of the earnings that is likely to happen, which is not much dependent on the market.”If the market were to fall further, what is it that you are planning to buy?It depends on how your portfolio is currently structured.

If you assume that you have a similar to market kind of structure, obviously, the overweight structures right now will be the finance and banking sectors. Because it is over-owned, it is something that will perhaps fall a little more than the rest of the market. However, it remains one of the areas that is likely to report the most robust earnings growth numbers going forward, even for the next two years.

Therefore, you would continue to look for opportunities to buy some of the big names there at a lower level. The consumer side is beginning to face some stress and so I would stay away from it. Cyclically, one of the areas which is weakest is, of course, IT.

And they are likely to underperform given the fact that the near-term numbers will likely be very weak. That provides you an opportunity for a longer-term investor to find a level at which one is comfortable with to go back and build a position there because these are companies which have shown the ability to adapt to changing market situations like the kind we are in. In the US, many of the IT companies have again picked up.