In its quarterly monetary policy review today, the Reserve Bank of India (RBI) reduced repo rate and CRR by 25bps each. The easing was to support growth, and declining inflation (especially core) provided the central bank the room to do so. Importantly, RBI’s guidance was dovish, clearly stating that it will be growth supportive. We expect the central bank to reduce policy rates by ~100bps in FY14 on inflation easing further and CAD narrowing. In our annual strategy report, our bullish case for market was primarily based on monetary easing and continued government reforms improving domestic macros. Today’s move, in conjunction with recent government steps (actions to reduce oil subsidy etc.), provides clarity on our call of improving economy. Accordingly, we reiterate our stance to rotate from quality to growth. We are overweight on banks, metals, industrials, real estate and cement, and underweight on consumers, IT and pharma.-edelwiss