After a stellar run, India’s economy has entered a softer patch that will continue for a few more quarters. We think that will portend an underperformance in local equities relative to other major benchmarks. Headline CPI inflation has fallen back within the RBI’s target range and, under new leadership, we think the RBI’s MPC will turn less hawkish and begin cutting interest rates at its next meeting in February. We forecast 100bps of cuts to the repo rate (to 5.50%) in the upcoming cycle, a more dovish view than that of the consensus.
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