Nilesh Shah, managing director and CEO of Envision Capital, in an interview with CNBC-TV18, said that the current rally in the market was due to the two headwinds — border tensions and election uncertainty — subsiding.

However, the big missing link in this rally is essentially earnings momentum, barring a handful of private sector banks and consumption plays, he said. "So, the big event to watch out for is earnings in April."

Homes, hospitality and consumer appliance spaces look interesting, he said. However, consumer appliances space has seen some rally and so one should be cautious on them, added Shah.

With regards to auto space, he said the passenger car segment still looks stressed and going forward it could face challenges from better public transport and cab aggregators. "Auto ancillaries will do relatively better and another connected space to benefit from this would be private banks that lend to the auto space," said Shah.

The rural theme is one of the strongest in the economy, he said, adding that it can be played through consumption. Rural is a secular opportunity with a combination of income transfers and loan waivers giving a boost to space, he said.