While the election outcome assures policy continuity and stability, it comes up against the many headwinds facing investors. Top picks: HDFC Bank, State Bank of IndiaGovernment focus expected to shift to large infrastructure projects; push to fix power supply chain problems. Buy: L&T, NTPC, ONGC, Oil IndiaDefense budgets unlikely to go up; disinvestment likely to keep pressure on state-run stocks. Buy: Bharat Electronic, L&TRBI likely to cut rates and inject liquidity over next few months, which should be good for rate-sensitive stocks. Banks, autos, real estate, mortgages to benefitBAML Economist expects RBI to transfer $14 billion to $42 billion of surplus reserves, which could provide the government room to recapitalize state-run banks and spend more on infrastructure.

Source: Mint May 28, 2019 03:45 UTC