HERE DOES one invest when all indications are that the market is likely to remain volatile till the formation of the new government? There are no clear answers yet.

But the consensus among market participants seems to be that it's best to stick with the big boys of the game till the market shows some signs of stabilising. "Things are unlikely to get better anytime soon. Other than fast-moving consumer goods (FMCG), most sectors are likely to be under pressure," says India Infoline co-promoter and executive director R Venkatraman.

On Monday, equity benchmarks tumbled over 3%, largely due to unwinding of positions built up in anticipation of some positive announcements in the Interim Budget. The 30-shareSensexclosed at 9,300.88 points, down 333.86 pts over the previous close.

The widely-held view is that Indian shares will react to global cues between now and the time of election results. Bets, if any, will have to be stock-specific rather on a sector as a whole. "I am bullishon private sector banks and select capital goods companies," says JM Mutual Fund CIO Sandip Sabharwal.

"There is a lot of talk about the order book and problems in executing orders. But I feel that input costs will also reduce significantly in coming days, thus improving the margins," he added.

Brokers are cautioning clients to keep away from mid-cap companies in general, as there could be nasty surprises in store because of liquidity problems over the past few months. "There is nothing for the market to really look up to, till the elections are over. Fourth quarter earnings of Sensex companies are expected to decline 15-17% —something that has already been factored in," says Religare Capital Market president (equity) Amitabh Chakraborty.

"Now is the time for investors to in vest in some beaten-down stocks. We think frontline auto, real estate and infrastructure stocks are good bets at these levels, “ Mr Chakraborty added