Analysts are expecting the Reserve Bank of India’s recent policy shift to affect market valuations more than corporate earnings. According to market watchers, the move signals a hawkish pivot in monetary policy.
Experts said the impact of higher interest rates, if they rise further, is more likely to trigger a re-rating of equities than a sharp collapse in earnings. They added that investors may need to adjust expectations on valuations.
The assessment comes as the market weighs how high the repo rate could go following the RBI’s tighter stance. For now, analysts believe the key effect will be on stock prices and valuations rather than a major hit to business performance.
