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The low return environment that India seems to be trapped but may get a breather in 2017 due to better equity valuations, bottoming of growth cycle (disrupted temporarily by the recent demonetization) and higher correlations with world equities on which the brokerage house is more constructive. If history is a guide, the trailing EPS growth sets up Indian stocks for strong medium term performance. Proprietary sentiment indicator has still not hit the buy zone so there may be some downside in the near term and thus, the recovery from the recent damage to share prices may not be V-shaped, he feels.
India's macro stability remains in its best shape in several years and policy momentum is the best since 2007. Financial conditions look easy and the inflation trajectory suggests more rate cuts are in the pipeline, he feels.
The low return environment that India seems to be trapped but may get a breather in 2017 due to better equity valuations, bottoming of growth cycle (disrupted temporarily by the recent demonetization) and higher correlations with world equities on which the brokerage house is more constructive. If history is a guide, the trailing EPS growth sets up Indian stocks for strong medium term performance. Proprietary sentiment indicator has still not hit the buy zone so there may be some downside in the near term and thus, the recovery from the recent damage to share prices may not be V-shaped, he feels. 
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