Experts reveal best festive stocks to buy amid global uncertainty

Markets have been under pressure in recent sessions despite the government’s move to cut GST rates. Concerns over global trade talks with the US and new protectionist measures have weighed on investor sentiment.

Retail investors are now looking for safer bets as the festive season begins, even as the Sensex and Nifty continue to show signs of weakness.

Dhananjay Sinha, CEO and Co-Head of Equities & Head of Research at Systematix Group, said the market has been facing consistent correction over the past one and a half weeks. “The global context has been quite adverse. We all know with the protectionism expanding to services as well in pharma, etc. So I think that is something that has actually weighed on the market and we have seen Rupee also depreciating. Earlier on, I think there was some positive momentum that had happened because of the GST reduction and all. So I think that has actually whittled in front of all these developments,” he explained.

He added that the focus will now shift to Q2 results. “Markets might be looking at whether there are positive surprises or not, especially in the context of how companies are adjusting to the GST initial adjustment. At this juncture, it doesn’t look like very strong Q2 numbers. Market is expecting a better second half,” he said.

CONSUMPTION AND AUTO SEEN AS STRONG PICKS

In terms of stock selection, Sinha said sectors linked to consumer demand may offer better opportunities. “There is a likelihood of more leverage spending that will happen from lenders. So I would say that it’s better to really look at sectors that will benefit from leverage spending. The most proximate sector that comes to my mind is auto. It has been doing fairly well. Entry level cars such as Maruti, two wheelers, and even tractors will continue to show better volume growth going forward,” he said.

He also pointed out that retail financiers are likely to benefit. “Select financiers such as Bajaj Finance and other retail lenders can actually gain traction as far as overall leveraging is concerned. Even the banks, particularly PSU banks selectively, can actually do well in the current context,” he added.

PHARMA STOCKS FACE MIXED OUTLOOK

On the pharma side, the outlook remains mixed following US President Donald Trump’s announcement of a 100% tariff on branded drug imports. Shailendra Bhatnagar, market expert at BT TV, said the impact would be limited as most Indian exports to the US are in the generic segment.

“Branded pharma, which the US has imposed a fresh 100% tariff on imports. Indian pharma is mostly generic. We send about $10 billion worth of pharma exports to the US. The only two stocks that I think will be in problem will be Sun Pharma and Biocon. They have a lot of branded products going into America. So I believe that was a knee-jerk reaction. Keep an eye out for Aurobindo Pharma. Keep an eye out for Glenmark. They have very high beta numbers in the pharma space. They should rebound,” Bhatnagar said.

Experts suggest that in the near term, retail investors should focus on sectors linked to domestic consumption, such as auto and select consumer finance stocks, while monitoring pharma closely for recovery in generics. With global uncertainty and trade tensions likely to keep markets volatile, a cautious and diversified approach could help investors navigate the current phase. 

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)