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Consumer staples, healthcare and select information technology stocks are likely to act as defensive havens amid an expected broader selloff in Indian equities, according to strategist Sushil Kedia.

Kedia, founder of Kedianomics, said financial stocks have shown signs of excess and are primed for significant declines, led by private sector banks and NBFCs. In contrast, FMCG, healthcare, and select IT names are expected to display resilience during the upcoming correction.

"Financials have committed the ‘ati’ — extremes must be avoided — and the first short-sell signals are flashing across the sector," Kedia said, citing an old Sanskrit adage, ati sarvatra varjayet.

He warned of potential sharp drops in major financial names, including up to 30–35% declines in stocks like Kotak Mahindra Bank, HDFC Bank and Axis Bank. Bajaj Finance and Bajaj Finserv could also see 50% corrections, he added.

However, Kedia sees opportunities emerging in other pockets. FMCG stocks like Hindustan Unilever, Tata Consumer Products, Asian Paints and PI Industries are likely to outperform, offering relative safety during heightened volatility. In healthcare, companies such as Dr. Reddy’s Laboratories and Sun Pharma are expected to show strength after a healthy six-month correction.

While IT stocks have lagged during the recent Nifty rally, Kedia noted that names like LTIMindtree and Mphasis may offer selective upside. He recommends avoiding short positions in IT and healthcare sectors, citing signs of bottoming and potential for outperformance.

Kedia cautioned that a 10-12% decline in the Nifty from current levels could create a "massive bear trap" rather than signalling a protracted bear market. He sees the broader market correction as an opportunity to gradually build portfolios in sectors and stocks showing relative strength, but this will emerge more clearly in due course, he said.

Public sector undertakings (PSUs) like Coal India, BPCL, ONGC and IRCTC, which have already corrected sharply, could also find support and make higher bottoms, he added.

"We're not calling for a sustained deep bear market," Kedia said. "The coming low could be the kind of massive bear trap that sets up the next major rally."

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