The investment bank said it favours cyclicals over defensives because of expectations of an improving economy and a bottoming out of earnings, according to a report dated on March 14.
It also recommended investors to focus on potential election beneficiaries in these markets.
It upgraded auto stocks to "overweight", while retaining the same rating on IT and energy stocks.
Goldman said Oil and Natural Gas Corp, Coal India, NTPC and Bharat Petroleum Corp as public sector companies that could be key election beneficiaries.
Among private sector shares, ICICI Bank, Larsen and Toubro, UltraTech Cement, JSW Steel, IndusInd Bank and Voltas were seen by Goldman as gaining from elections.
The Nifty earlier rose as much as 1.1 per cent to a record high of 6,574.95.This is one view, but the macro scenario is not as rosy as it looks and this assumption is that the election result is for a emphatic BJP win, which is a distant dream as the signs shown are for a fractured result. The best an investor to is get of the market when your greed is satisfied and watch from the side lines till one is sure which way this market is headed.
There is one rule in the market which never fails, market never goes where all the people want it to go and nothing is certain.