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