You can bank on banks. Or so it would seem from the 66 per cent rise in the BSE Bankex over the past year. In a rising interest rate scenario, banks were able to hike rates on loans and while the cost of deposits too rose the bigger banks have managed to maintain or improve their net interest margins.

In a strong economy where credit growth is still healthy, bank stocks should do well provided they keep their non-performing loans in check. Banks such as HDFC Bank and Axis Bank should outperform.

Tech funds on the other hand, are an absolute no-no in an environment where the rupee is appreciating. Moreover, with attrition high and wage costs increasing, tech firms are going to find it difficult to protect their margins.

Besides, the spending on technology could slow down if the US economy doesn’t get going. Valuations for stocks such as Infosys are still demanding though TCS is attractively valued.

The current year is going to be a difficult one for FMCG firms given input cost pressures. Despite a reasonably good growth in the top line, they will find it hard to sustain margins.

The FMCG index has been flat over the past year mainly because heavyweights HUL and ITC didn’t do too well. But a couple of stocks, including ITC and Nestle could outperform.

Its a rough ride for the auto sector which is finding it hard to push volumes. With the exception of Maruti Suzuki, none of the companies is likely to turn in strong numbers given that interest rates remain high.