With Indian stocks already up sharply this year, the impact from any potential QE3 might be more muted since some of the easing hopes may already be priced in, CLSA argues in a note on Wednesday.
CLSA adds previous instances of monetary stimulus have had diminishing impact on Indian equities, although financials have outperformed.
The brokerage raises its "overweight" stance on Indian drug makers in its model porftolio by adding Sun Pharmaceutical Industries
Also removes Tata Steel from its model portfolio, while replacing BHEL with Adani Ports
Private sector banks remain overweight, but CLSA replaces IndusInd Bank
Finally, CLSA raises IT services to "neutral" in its portfolio, raising the weightings of Infosys, while increasing its weighting of ITC despite keeping consumer staples at "underweight."
