Even as banking remains the most important sector in India, defensive sectors like pharma and IT are giving very good opportunities and breakouts, says Atul Suri, CEO of Marathon Trends-PMS. He sees that the trend leadership is changing.

While banking in the most important sector as banks and financials are termed in one breath, Suri believes that banks are behaving separately and financials are behaving separately.

“PSU banks dominated the whole banking space, they did well for the last two-three years but financials are doing very well. A lot of money is moving into the broking stocks, AMC stocks, insurance stocks etc. so I find that there is a shift that is happening even within sectors,” he explained.

Certain sectors and themes that had dominated the stock market for three years had started underperforming in the last two to three months and some sectors have taken the bull by the horns, he said.

“There are three sectors that stand out for me – pharma, IT and fast-moving consumer goods (FMCG) and consumption stocks,” he said.

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He believes that the market is moving towards defensive plays like pharma and FMCG and to offset that some of the industrials have started cooling off a little bit.

He feels that the stock market should be given some space to play and seasonally September has been a volatile month and one has to be prepared for that.

According to him, the key thing is not going to be the market but it is going to be sectors and themes because, during the times of churn, one will find new leadership emerges.

In terms of crude oil, he believes Brent around $70 per barrel would be a good play

“If it breaks that then it may be a bit of a worry because if commodities crack big time, it may put a question mark on the overall health of the economy because you need commodities for growth,” he said.

He thinks commodities and currency in a band is always a good idea as commodities are very closely linked to inflation. If the commodities swing too far on the other side, it would imply that the demand for commodities is out which would imply that there is a problem where recession could be coming.

Nvidia, a major player in artificial intelligence, saw its shares plummet by 9.5% on Tuesday, marking the largest single-day drop in market value ever for a US company.

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“I have never seen one stock dominate the market – it affects the whole sector, the whole semiconductor space,” he said.

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