and earnings upgrade will help reduce the non-performing assets of banks.
In the near term, there would be strong inflow of dollars, which would result in strengthening of the rupee. This will not bode too well for IT and pharma companies focussed on exports. However, IT stocks still offer a good hedge against the risk that the government’s actions to resolve domestic growth issues fall short of market expectations. Normalising growth conditions in the US and Europe will boost demand for IT services as outsourcing budget of companies is getting traction in both the markets.