Global giant, UBS has said that the 50 basis points cut in cash reserve ratio (CRR) announced by the Reserve Bank of India (RBI) on Tuesday signifies a turn in the Indian monetary policy.

UBS said in a note released on Tuesday that, "We believe it is time to add beta and turn less defensive on Indian stocks." The global bank increased rating for infrastructure stocks to overweight from underweight and real estate to overweight from neutral in India.

It also changes its rating to underweight for consumer and pharmaceutical stocks and to neutral on banks and auto stocks. New entrants into the model portfolio proposed by the bank include ICICI Bank, State Bank of India, Larsen & Toubro, Tata Power, Prestige Estates, Phoenix Mills and Asian Paints, Bharti Airtel, Federal Bank, ICICI Bank, L&T and Mahindra & Mahindra.

The sensitivity index of the Bombay Stock Exchange (BSE), Sensex fell 25% in 2011, becoming the worst performing in Asian region. However, factors like inexpensive shares, growing indications of stability in the rupee value and attractive valuations are showing signs of a turnaround in the markets.

Analysts believe that foreign institutional investments in the country will be high in the year and will help boost markets.