Which sectors will outperform?

Its time for long term investors to build their portfolio. If you intend to hold stocks for a minimum one year it is the time to invest, because blue chips are available at bargain prices. The markets are clearly in a consolidation mode. Despite the fall on Monday 31st March, the trend remains positive. Which are the sectors that will lead the markets in the next uptrend:

• OIL & GAS: India is determined to find a solution to its energy crises. The news on new oil & gas discoveries is encouraging. The companies that are going to benefit from the new discoveries are: ONGC, RIL, Cairn India. Refining/Distribution companies in the sector will also benefit in the long run. Companies to watch out will be RPL, IGL. Even the public sector refiners IOC, BPCL, HPCL merit investment at these levels.
• FMCG: With consumer spending continuing to increase, FMCG companies with large distribution networks are likely to reap rich benefits. Stocks that merit investment are HUL, ITC.
• Pharma & Healthcare: The fillip given by the budget to the healthcare sector, augers well for the gerenic suppliers with a strong R&D back up. One can find merit in Ranbaxy, Sun Pharma. The healthcare sector comprising of hospitals is going to reap the benefit of tax holiday announced in the budget. Stocks to watch out are: Apollo Hospitals, Fortis Healthcare.

Banking (especially the large Public sector pack) and the Auto pack is beaten down quite a bit. But inflation is playing a spoilsport in their recovery. Once the inflation issue is settled these sectors will start outperforming the markets. A contrarian investment could also be made in the frontline IT stocks like Infosys, TCS, Wipro, which are likely to give reasonable returns over a one year period.

Short term hiccups will continue, but the market is poised for a smart recovery in the month of April.