Neelkanth Mishra of Credit Suisse says while the broader Indian market hasn't moved much in the last two months, it has continued to outperform global equities marginally.
The outperformance is 8.8 percent in 2016 so far, helped by USD-INR stability despite strong Dollar index.
According to him, September 2016 results are likely to be weak, and the pace of cuts may pick up. Mishra says add global volatility, and broader markets may stay rangebound till signs of a broad-based economic pick-up become visible.
He says he expects indicators to show a pick-up by CY16-end, but GST start in FY18 could cause disruption for a few quarters, affecting earnings.
Mishra stays cautious and watchful on broader markets for now.
Meanwhile, Surendra Goyal of Citi says bond yields in India have declined nearly 100 basis points in 2016 so far and that has supported/helped the market despite earnings growth remaining unchanged or falling a bit short of expectations.
He further says while he continues to maintain that earnings growth remains the key variable, lower bond yields remain a variable to watch out for with easing inflation, the trend could continue to support Indian equities.
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