Tuesday, 24 April 2012

India can give 10-15% return in FY13: Foreign brokerages

Although CLSA has cut its target for the Sensex to 19,000 from 20,000, it still maintains its "overweight" rating on the index.
While the foreign brokerage firm has turned less bullish on the market due to adverse macro developments over the past few weeks, it still expects 10-12% market returns over the next one year, helped by valuations.
Meanwhile, last month, Goldman had set a March 2013 target of 6,100 for the Nifty index. That means around 15% upside from the current levels. Goldman Sachs had upgraded Indian stocks to "marketweight" from "underweight".
However, Sakthi Siva of Credit Suisse is neutral on India at this point in time. "We tend to favour markets that are in the cheapest four club. India actually joined the cheapest four club on January 3 and we upgraded India on the back of that call. But fortunately or unfortunately, India then put on about 25% in US dollar terms. So, as a valuation model it has since dropped out of the cheapest four club," she elaborates. 
Siva’s call is not to chase the rallies and buy the dips. "Every time there is a market correction or a dip, we are happier to recommend buying on those dips," she adds.
Challenges:
Goldman says oil prices remain "the most significant risk" to its "positive" view on India. Also, policy inaction can hurt the market sentiment. Global uncertainty is another concern that India has to deal with. The concerns in Europe will also probably persist for a while.
Given all these challenges, it is prudent to be cautious.

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