Year 2017 was good for the market, with the Nifty gaining 29 per cent, largely on the back of sentiment or price-earnings expansion, rather than an uptick in earnings. This, however, could change with brokerages expecting a healthy growth in earnings in 2018, driven by policy reforms and a revival in private capital expenditure. Clean-up of the distressed assets, revival of rural demand on the back of normal monsoons and farm loan waivers, and higher infrastructure spending should help consumption and macro-driven sectors, such as financial, automobiles, fast-moving consumer goods and infrastructure among others. While very few sectors and stocks are trading at attractive valuations, given the high expectations, there are stocks in the large-cap space which offer comfort, both on growth as well as on valuations.
This is crucial, as in 2018 markets are unlikely to see a smooth run, given the headwinds in the form of further rate hikes by the US and possible liquidity tightening by other central banks, domestic inflation on the rise, expected slippage in India's macros and eight state elections scheduled in the new year. Here are 10 stocks, handpicked from the 2018 recommendations of leading brokerages.