Sanjeev Prasad of Kotak Institutional Equities said it is not a bad idea to sit on cash currently as it is difficult to find pockets of opportunities in the current market scenario.

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In an interview to CNBC TV-18, Prasad shared his views on the certain sectors in the market:

Consumer Staples: Valuations of most staples are not very cheap. Not a very great defensive but may hold up better than the rest of the market.

Pharma: Valuations are reasonable. Domestic pharma businesses are doing better.

IT: Looking interesting after the derating it has seen. Can see tailwinds from the currency partly offset weak demand concerns.

Banks: Tricky one. Look fairly valued. However, can take a bigger hit in case there is a negative surprise on the economic front.

The Monetary Policy Committee of the Reserve Bank of India has begun its three-day policy meeting and all eyes will be on how the central bank reacts to the third consecutive 75 basis points rate hike from the US Federal Reserve. Consensus around the Street is that the MPC may hike interest rates by another 50 basis points on Friday. While Prasad believed earlier that India may get away with a shallow interest rate cycle, he now felt that the RBI may be forced to hike rates faster than expected in response to the US central bank.

"It is just not a case of inflation, it is also the external situation and the haemorrhaging which the currencies are facing against the US dollar that they have to manage," he said.

Prasad was also hopeful that food inflation in India may cool down in the second half of the financial year, which now, according to him looks difficult due to the quality of rainfall seen this season.

Also Read: RBI set for fourth straight rate hike to quell inflation, say experts

Brent Crude is set for its worst quarterly drop in two years. The cool-off in oil prices has given India some much-needed breathing space, according to Prasad. However, he is quick to issue a caveat. "This equation may change for the worse if oil goes back to $100 or $110 kind of a number," he said.

On Maruti, Prasad mentioned how the Street is pricing in all sorts of optimism on opportunity and premiumisation, which he finds difficult to reconcile with the kind of volumes he expects in India going forward. "Maruti's strong point still remains the entry-level segment but it has lost of market share in the SUV segment," he said. "Maruti has some challenges currently."

Other Key Takeaways:

Midcap IT companies have their own strengths in certain areas. Need to see their client concentration before taking a call.

There are tailwinds for the credit card sector to grow.

Expect policy rate to be around 6.5 percent.

(Edited by : Shoma Bhattacharjee)