Mumbai, Jul 9 (PTI) Even as the Sensex closed above 15K level for the first time, global research firm Citi said the benchmark index is likely to hit the 16,000 mark by the end of this year, with a robust growth in corporate India’s revenue aiding the climb.
“We are positive on Indian equities over the next 6-12 months and expect the growth to remain robust. We have a target of 16,000 for December and 17,500-18,400 for December 2008,” Citi Investment Research India head Ratnesh Kumar said in its latest report.
In the first half of the year, the Indian stock market had lagged its regional peers due to jitters caused by inflation, rate hikes, tightening liquidity and currency appreciation, even though it bounced back from the March lows and is up 7.8% so far in 2007.
“But the worst is over on these concerns now... We also expect the Central bank to take fewer market dampening actions over the next 6-12 months,” Kumar said.
Inflow of funds has made a significant rise and foreign institutional investors have already brought 1.81 billion dollars this month, compared to four billion dollars in the first half of the year, he added.
However, the research firm cautioned that this year growth in the stock market would be less spectacular than recent years.
On the earnings side, Citi forecast a fat revenue figure to adorn corporate India’s books on the back of rapid economic growth though the performance might not be that spectacular.
Despite a high base, 25-30% earnings for the last five consecutive years, Citi continues to see solid earnings growth in India.