Defensives are passé, time to look at high-beta plays

Indices hitting record highs has experts upbeat; investors expect strong foreign inflows

- HARSHITA SINGH

Staging a strong turnaround from the year's lows, equity markets have swiftly reclaimed their 52-week highs.

Since July, when markets started moving north, the S&P BSE Sensex and the Nifty50 have rallied about 17 per cent each.

The BSE Sensex breached the 62,000 mark on Wednesday after over a year and is just 250-odd points away from its all-time high.

With visible signs of moderation in inflation, the markets seem to have moved past fears of interest rate increases and investors are now anticipating strong foreign inflows into domestic equities, say analysts, who now expect the market momentum to pick up pace.

Mayur Shah, portfolio management services fund manager at Anand Rathi Advisors, for instance, expects the front-line indices to hit new record highs in the next two-three months and suggests investors move away from classic defensive plays like fast-moving consumer goods (FMCG) and pharmaceuticals (pharma) and park their money instead in the financial sector (banks, non-banking financial companies, etc) to generate a good return on their investment.

"With inflation in the global markets now thawing, we expect the interest rate-hike cycle to peak in the next two-three months.