Infrastructure to benefit most from UPA win

18 May 2009

Udayan Mukherjee thinks United Progressive Alliance (UPA)  will spend quite a bit on infrastructure. So infrastructure, will be the bigger cluster which will benefit materially.

Infrastructure will be the bigger sector to benefit materially ftom the UPA's win. CNBC-TV18 shares with domain-b Udayan Mukherjee's comments.

There will be few sectors to bet this morning. I think it's been noted over the weekend that some of the sectors where people were hiding in, they might go underweight on. Stocks like Hindustan Unilever, FMCG, pharma even IT because the rupee is already at 48.5, they may under perform in this kind of a market environment.

There are two large clusters which people would be betting on; one is the financials because of expectation of reforms etc. But there have been very pertinent points which have been made by lot of commentators over the weekend, suggesting that the Congress Party's focus is not exactly on the capital market side of it.

They may do reforms in their own way which are very long-term, medium-term repercussions on the economy and very positive but they may not rush to divest first or to do bank consolidation first or get FDI (Foreign Direct Investment) and insurance first; they may do other bigger things.

So the bank rub-off is not unexpected or unjustified but it might be more of sentiment and it may take a long while for things like government bringing stake down to below 51% in banks, rushing to consolidate banks etc. So banks will go up this morning but for sentiment rather than material things which will happens just in the next six months.