Stock Market: Where are the opportunities in the market now, which sector should you stay away from, new report released:

News Topical, Digital Desk : Financial services company Equirus Securities has released its annual India Equity Strategy Report, which lists top stock picks for different sectors. The report says that valuation risks are possible in the market in the short term but there are signs of strong growth in the long term.

Where are the opportunities

Equirus Securities has given 'overweight' rating on auto, capital market, cement, FMCG, infrastructure, internet platform, NBFC, oil and gas sector. While underweight rating has been given on building materials, industrials and defense, real estate, textile and logistics sector. At the same time, equal weight rating has been given on bank, chemicals, consumer durables, EMS, IT services, metals and mining, healthcare and retail sector.

Which stocks have opportunities In the report, trust has been expressed on ABB India, BPCL, Cholamandalam Investment in large cap stocks. At the same time, the top picks in mid and small cap are Aditya Birla Real Estate, Alkem Labs and Arvind Fashions.

How are the valuations The valuation of mid-cap is still high, but there is a possibility of better earnings than small cap, but invest only in select growth sectors. In this environment, investing in large cap is the safest, good margin of safety is visible here. Mid-caps should be invested selectively in sectors where structural growth is taking place. Small-caps should be cautious until their earnings match valuations.

Large caps perform better, focus on domestic sectors In the near future, large caps and good quality mid-cap stocks are likely to perform better as their valuations and earnings estimates are getting balanced again. Sectors that are expected to benefit from improvement in rural incomes have been given 'overweight' rating. These include auto, cement, NBFCs, and FMCG. On the other hand, sectors whose valuations have increased significantly and earnings are slowing down, such as building materials, industrial and defense, have been given 'underweight' rating.