As Indian equity markets continue to hit record highs, global investment bank Citigroup has raised the BSE Sensex December 2015 target to 33,000 from 31,000.
The brokerage also increased the Nifty target to 9,850 from 9,240.
It said 2015 should be front-loaded with falling interest rates and back-loaded with actual economic recovery amid steady reforms. It added that falling rates in a rising economy/earnings could fire the market more.
Citi expects policy rates to fall by 75 basis points in 2015.
Rejigging its portfolio, it said it is overweight on banks, energy, cement and pharmaceutical shares.
It listed Adani Port and Special Economic Zone, Aurobindo Pharma among top large-cap picks and also likes Ashok Leyland and DB Corp among midcaps.
Meanwhile, JP Morgan too epects the Sensex to hit 32,500 by end of December 2015.
“Indian equities are benefiting from the start of a new growth cycle, a benign global environment resulting in a positive shift in terms of trade and reforms, which can lift India's potential growth rate,” the brokerage said in a note to clients.
“From a portfolio perspective we back cyclical stocks and sectors that could benefit from policy changes,” the note said, while sounding a cautious note on high beta stocks.
Morgan Stanley is overweight on oil & gas, auto, banks and IT sectors. It is underweight on FMCG, healthcare, capital goods, cement and power utilities.
With inputs from Reuters
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