Expert Recommends Power, Steel, Aviation; Cautions on IT Rally

Market expert Neeraj Dewan has advised against chasing the current rally in the IT sector, citing weak guidance. Instead, he suggests investors look towards sectors like power, energy infrastructure, steel, aviation, commercial vehicles, FMCG, and select auto ancillaries for investment opportunities.

This guidance is significant for Indian market participants as it provides a clear directional shift in investment strategy from a prominent expert. It highlights a potential rotation out of growth-oriented IT stocks into more cyclical and defensive sectors, reflecting current market conditions and future expectations.

The IT sector (e.g., TCS, INFY, WIPRO) could face selling pressure or underperformance due to this cautious outlook. Conversely, sectors like Power (e.g., NTPC, Power Grid), Steel (e.g., TATASTEEL, JSWSTEEL), Aviation (e.g., INDIGO, SPICEJET), and FMCG (e.g., HINDUNILVR, ITC) may see increased investor interest and potential positive momentum.

Traders should monitor the performance of IT stocks for signs of correction or continued weakness. Simultaneously, observe volume and price action in recommended sectors like power, steel, and aviation for confirmation of capital rotation. Keep an eye on commodity prices, especially oil, for aviation sector impact.

• •Neeraj Dewan advises avoiding the IT rally due to weak guidance.
• •He favors power, energy infrastructure, steel, aviation, commercial vehicles, FMCG, and select auto ancillaries.
• •Dewan sees opportunities in renewable energy and battery storage.
• •Oil price stabilization is expected to aid aviation stocks.
• •Risk flag: Further deterioration in global economic outlook impacting export-oriented IT.