Inflation at 12% could be negative for HDFC: Credit Suisse

Sakhti Siva, Credit Suisse: With annualised inflation in India running at 12%, we believe this could be negative for expensive stocks like HDFC and TCS, leading to underperformance in the near-term. While European concerns could keep their valuations elevated, we believe potential central bank easing and a very narrow valuation gap between cyclicals and defensives could cause underperformance.

Joseph A LaVorgna, Deutsche Bank: An important change in the Fed commentary was that it stands ready to ease more, which hints at QE3, should economic and financial conditions warrant. Moreover, in stating the possibility that further easing actions might be warranted well before the election season begins in earnest, the Fed is telling financial markets that outside pressure will not impact monetary policy decision-making.