Global brokerage Jefferies has shifted its sector preferences, backing banking and pharmaceutical stocks while reducing exposure to automobiles, cement, and energy sectors.
The brokerage maintains a constructive outlook on India’s banking majors, including SBI, HDFC Bank, and Axis Bank, citing their resilience and growth prospects. The pharma sector also features in Jefferies’ preferred list as it navigates global demand dynamics.
However, the brokerage has trimmed positions in auto, cement, and BPCL due to margin compression risks. Elevated input costs and crude oil-linked pressures are weighing on profitability in these sectors, prompting the cautious stance.
On the broader market, Jefferies projects the Nifty 50 index to reach 25,000, reflecting moderate bullish sentiment on Indian equities. The outlook underscores the divergence in sectoral fortunes as the economy navigates inflationary headwinds and commodity price volatility.
Investors tracking sectoral rotations should note that while financial services and healthcare remain attractive, cyclical sectors face near-term headwinds. Market participants will closely monitor inflation data and crude oil trajectories to assess if margin pressures in auto and cement persist or ease in coming quarters.
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