Analysts rejig model portfolios, say diversification is key in range-bound markets

Domestic equity markets are moving range-bound amid the ongoing festive season and the last leg of the Q2 results. BSE Sensex is struggling to hold above 65,000-mark, while NSE's Nifty50 is much below key psychological levels of 19,500. Party in the midcap and smallcap counters appears to be over amid the lofty valuations in the second rung-counters.

Citing the Amidst range-bound markets, Phillip Capital has made stock level changes in its model portfolio without any meaningful changes in the sectoral stance. Portfolio continues to remain well diversified with an overweight stance in industrials, said the brokerage firm.

Commenting on Nifty50's supportive valuations, BOBCAPS said that most major global indices slipped 2-4 per cent in October and Nifty 50 shed 3 per cent, while Chinese stocks lost another 3-4 per cent. Nifty 50 forward P/E is now below its last 5-year mean, indicating limited downside, it added.

"We have reduced weights in Cement and continue to remain massively underweight in IT. Upcoming state elections will be a near-term event to watch for markets. Interest rate pause by Fed and stable to marginally lower yields is a positive – thus our exposure to financials remains unchanged," it said.

BOBCAPS remains 'overweight' on consumption, while 'underweight' stands on IT. Its model portfolio is based on stocks in the BSE Sensex but with modified weights and the replacement of a few names. its stock picks reflect our continued preference for consumption-based sectors.

India’s economy and markets are going from strength to strength. Investors are raising the debate as to whether this strong run can continue. A wide variety of growth indicators suggest that the economy is doing well. Investors are generally bullish and this has been reflected in a strong run in the markets.

"We are overweight on FMCG and auto, equal weight on financials and energy, and underweight on IT," it said. Its model portfolio has the highest weightage for HDFC Bank (14 per cent), Reliance Industries (11 per cent), ICICI Bank (10 per cent) and Larsen & Toubro (6.5 per cent).

Phillip Capital has increased the weightage of Tata Steel, LTI Mindtree, Jyothy Labs and Godawari Power Ispat, while Bharat Dynamics, Nestle, National Aluminium Company, Coforge, Kaynes, Polycab, Sun Pharma, City Union bank and Indraprastha Gas are the new stocks added to the portfolio.

On the contrary, it has reduced weightage of ICICI Bank, Ultratech Cement, Infosys, ACC, Thermax, Hindalco, Bajaj Finance, Ambuja Cement and Avenue Supermart (Dmart) in its portfolio, while has dropped Cipla, Orient electric and ITC from its model portfolio.
 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

Also read: Hot stocks on November 7: Suzlon Energy, Zomato, Dalmia Bharat, Radico Khaitan and more              

Also read: ESAF Small Finance Bank booked 15.7x; issue closes for bidding today