India's risk-on rally 'premature': Credit Suisse

Credit Suisse says it continues to favour relatively defensive stocks with low price/earnings ratio like HCL Technologies Ltd, NTPC Ltd, Coal Indiaand NHPC Ltd.

Alternatively, it prefers businesses where operating profits are unlikely to be hurt much by the economic slowdown, such as United Spirits Ltd. .

The investment bank says INR's 36-country real effective exchange rate, or REER, is close to two-decade lows. Potential INR stability or appreciation can help drive down WPI and help rate cuts, it says.

However, the market belief that this means a risk-on rally is 'premature', the note says.

Also read: Trade deficit to improve; RBI to cut 25 bps: Credit Suisse