Jefferies increases weight in India's large-caps ahead of expected RBI rate hike

Welspun

06/10/2026 06:18

** Jefferies says risk-reward is becoming more favourable to India's large-caps on better relative valuations compared to mid-caps while the earnings growth gap is narrowing over FY2026-2028
** Brokerage increases weight on large-caps, which offer hiding places as they trade below average valuations
** Adds Kotak Mahindra Bank KTKM.NS and Welspun Corp WGSR.NS into India portfolio, increases weight on Reliance RELI.NS while trimming weight on rate-sensitives such as realty, non-bank lenders and consumer discretionary stocks
** Says deficient monsoon has created upside risk to inflation in India, alongside global rate and commodity price worries
** RBI is expected to raise key interest rate by 25 basis points on Wednesday, which would be the first hike since February 2023, on concerns over crude prices above $100 a barrel, a weakening rupee and the weakest monsoon in a decade
** While India's yield gap with US is at 20-year lows, inflation gap is lower too, says Jefferies, adding the current rate-hike cycle should be shallower than 2022
** Nifty 50 .NSEI is down 8% since the last policy meeting on August 5, 2026
     

 (Reporting by Bharath Rajeswaran in Bengaluru)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))