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Indian shares headed for correction, but outlook strong - BofA Merrill

Brokers trade on their computer terminals at a stock brokerage firm in Mumbai August 22, 2013. REUTERS/Danish Siddiqui/Files
Brokers trade on their computer terminals at a stock brokerage firm in Mumbai August 22, 2013. REUTERS/Danish Siddiqui/Files

Indian shares could fall to correct about 5 percent over the next two months, Bank of America-Merrill Lynch says in a note.

BofA-Merrill says pace of reforms "slower" than expected.

But adds it still expects India's earnings to double over the next 4-5 years.

Says view supported by mean reversion of corporate profits to GDP among other indicators.

Adds auto, cement and energy sectors will drive earnings rebound

Top buys that fit its theme are: ICICI Bank , State Bank of India, Maruti Suzuki and Oil India .

(Reporting by Abhishek Vishnoi)