Stocks that could add sparkle to your portfolio

Even as the markets have rallied 18 per cent since August-end this year, there is more to be made, experts say. Though risks remain, experts see scope to gain from an expected recovery in the Indian economy, higher export demand, a stable rupee, peaking interest rates and, finally, an improvement in earnings in the coming months.

They also believe the Indian market would be at higher levels by next Diwali.

"I think the rally in the market will continue, backed by benign global liquidity and supported by a recovery in the Indian economy, as exports growth picks up. Also, from a valuations perspective, we are trading at a near-ten-year average," said Rakesh Arora, managing director and head (research), Macquarie Capital Securities.

Research houses are advising clients to invest selectively in equities, considering uncertainties remain and general elections in India are just a few months away. However, many experts believe there is scope to marginally increase the weight in favour of high-beta stocks, as they look for potential turnaround candidates on expectations of a recovery in economic growth. (Click for details)

Since a complete shift isn't advisable yet, companies benefiting from a global recovery and the rupee's depreciation---such as the defensives space (pharma and information technology)---remain in favour. The advise, however, is to stick to high-quality names. Here are top picks of some leading research houses