CNBC-TV18's stocks editor, Udayan Mukherjee said that when the markets reach at these kinds of levels then people wonder what to buy because there is little bit of hesitation, you are almost at historic highs, can you cross over. What do you buy if you are feeling a bit uncertain because sure it could cross over there but you are at elevated levels right now and then people want to have some margin of safety.

There are two things which happen around new highs one of course people gravitate towards a lot of quality where there is visible growth so that you don’t go wrong on the story. You essentially are parking your money given a lot of market risks at these levels in visible growth story. So even if the market were to correct maybe the stronger sectors will correct less and eventually they will get back to new highs as we have seen with this sector. So maybe it is money moving towards top quality, visible growth stories, not to get caught on the wrong foot around the previous high and then correct very significantly on a correction. The other thing which happens is people seek a lot of undervalued stocks which haven’t moved and therefore we have seen some buying visible in sectors like cement, auto, oil refineries over the last couple of days because that is the reverse logic.

The market is at new highs, where are the stocks which are still below 30% below their peaks, can we find some value there, I think we can find some value there. There are interesting psychological gains and churning of portfolios which goes on around a historic high and maybe that is what we have seen in capital goods. Stay with the good stories, stay with strength, stay with visible growth and that is why people are lapping up Larsen and Toubro, BHEL, ABB kind of stories once again. Interestingly it is not those capital goods stories only you have seen money moving into some of the utilities over the last few days. Reliance Energy and Tata Power have also seen some buying so maybe that space continues to remain as a bit of a leader in our market if we were to head to new highs.

Source: moneycontrol.com