India's Real Estate companies and Banks will become major players in the rally that's beginning to take shape, while mineral exporters like Sesa Goa and NMDC become "Sells".
As overcapacity in Steel becomes apparent in China over the next three months, India could become a favoured destination for dumping of Steel products (zero duty imports), while local manufacturers which are banned from exporting steel, and have to pay higher duties on iron ore would stand compromised.
In such a scenario, we would advise investors to move into global steel players like Tata Steel-Corus over domestic steel plays.
We believe, as risk aversion takes a backstep, aggressive growth will come to the front with Real Estate, Construction and Banking in front (All domestic, non China plays), while Consumer Staples and Pharma go into a slumber.
Today, we are downgrading Indonesia in order to upgrade India.There are two key reasons for this move. The first is a switch from Indonesia, a commodity exporter, to India, a commodity importer.