Positive on market, prefer cyclicals over defensive stocks: Manish Gunwani

In a chat with ET Now, Manish Gunwani, Sr Fund Manager, ICICI Prudential Asset Management, shares his market outlook. Excerpts:

ET Now: What is your sense in the markets at this point, how is it that you are placing yourself as far as investment strategy is concerned and also what kind of cash levels are you keeping ahead of elections?

Manish Gunwani: We are positive on the market. If you combine an improving macro and valuations of some expensive sectors plus the fact that domestic investors are quite heavily under invested in equities then the market is fairly well placed at this point of time. Our cash levels are not really high at this point of time since we are positive on the market

ET Now: What happens to the cyclical side of the index and what is your strategy in terms of building positions there?

Manish Gunwani: Going forward, we are more positive on cyclicals versus defensives. Over the last few quarters we have been gradually increasing our positions in sectors like autos, banking, etc. So, at this point of time we have more emphasis on cyclicals versus defensives and this is also manifested in the focus blue chip portfolio where we have pretty significant weights in autos and banking.