The biggest near-term catalyst for the Indian market is the upcoming general election and the current rally is seen as the one fuelled by hope of a stable government. Gautam Chhaochharia, head of India research of UBS Securities sees the Nifty touching 6,900 on favourable election outcome.
Speaking to CNBC-TV18, he said, sector rotation will take front seat and this up move will be lead by cyclicals largely banks, which have a considerable weightage in the index. Other sectors like industrials and power would also perform well.
Traders who are looking to play recovery in the capex cycle theme can buy infrastructure stocks, but from six months – two years perspective, one should be cautious because on the ground revival in the sector will take a longer time.  L&T and  BHEL are his top picks from the capital goods space. He likes  Voltas  from the midcaps.
 UBS prefers sticking to private sector lenders and is underweight on public sector banks, however, those interested in investing in this space can consider PNB , which looks good from a valuation perspective, he said.
He is overweight on the IT sector from a strategy perspective and expects recovery in US and Europe to aid the sector. Giants  TCS and  Infosys are his top bets. However, he cautioned that sector rotation can drag IT services. Recent rupee appreciation and hopes of economic recovery has led investors to take money from this safe heaven sector to cyclicals.
Meanwhile, he expects the gas price hike to eventually go through. He is positive on  ONGC and RIL .  From the media space, he is positive on Sun TV , Dish TV and Hathway .
Continuing his bullish tone, he added that correction steps taken by previous government have given confidence in the Indian economy. He feels that bulidimng blocks for economic growth are in place. The broking firm is constructive on Indian market from a two-three year perspective