The rally in Indian shares on Thursday was in response to validation of the exit poll results as most of the gains were materialised after exit polls were announced, said Nilesh Shah, managing director and CEO, Envision. He added that markets could consolidate.
"We have to keep in mind that it is essentially around this kind of levels that the market has been facing resistance even earlier on during the year. It is quite possible that it could face – of course, the markets did kind of brace for higher levels, but there seems to be some kind of profit booking happening around those levels,” he added.
Among sectors, Shah said consumer remains the top favourite. "That is probably India’s biggest and best structural story and so there is no denying the fact that consumer remains the top favourite for allocation.”
Speaking about the priorities the new government should focus on, Shah said, “The way the markets have run up and the way the markets have responded, clearly the expectations are running high. There is a school of thought that there is not going to be any significant change, but I am not entirely sure whether the market is prepared for a status quo.”
“Some of the top priority areas could be to rationalize GST, bring down some of the rates. Earlier there had been talks about, for example, bringing down the GST rate on cement. One has to see the kind of state in which the real estate sector is in and some of the core sectors are in. Maybe that could be a priority where some of those GST rates could get tinkered, rationalized, simplified. So, that will clearly be one big area that is there.”