Synopsis
There are clear indications both from the RBI and in the budget that interest rates are likely to soften. Now, there are many sectors whose fortunes are linked to the rate of interest. For instance, many consumption items are brought on credit and interest rates impact the EMIs people pay. And with more disposable income in hand, thanks to the lower tax liability announced for the current financial year in the budget, consumption of some goods may increase.
There are some sectors which have a very strong relationship with the interest rate cycle. For instance, all the sectors where purchases are made through financing tend to see higher demand when interest rates start to go down. In the last two months there have been enough indications that interest rates will come down. Of course, there is difference of opinion in terms of the quantum of the cut (75 or 100 basis points?) and the speed at which
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