Goldman upgrades India to ‘marketweight’, raises Nifty target

Mumbai: Goldman Sachs upgraded its view on India to “marketweight”, with a target for the broader National Stock Exchange (NSE) index Nifty of 6,900 points.

Goldman noted optimism over political change is trumping economic concerns, given what the bank says are expectations that the opposition Bharatiya Janata Party (BJP), led by prime minister candidate Narendra Modi, could prevail in parliamentary elections due by May 2014.

Goldman also noted that external capital account pressures have moderated for now, and cited signs of a cyclical pick-up and structural improvements in the economy.

The investment bank likely noted the earnings outlook is stabilizing, while noting that retail redemption pressures could moderate, among the factors behind its upgrade.

Goldman says technology, healthcare, and energy are its top sectors.

Goldman says it likes technology stocks including HCL Technologies Ltd and Tech Mahindra Ltd, oil and energy scripts such as Reliance Industries Ltd, Bharat Petroleum Corp. Ltd and Coal India Ltd, banks including Yes Bank Ltd and IndusInd Bank Ltd and select auto and cement stocks.

The US bank also included some mid-cap infrastructure stocks which are trading at inexpensive valuations such as Adani Power Ltd, NHPC Ltd, materials stocks like Grasim Industries Ltd, and industrials stocks like Container Corp. of India Ltd and Adani Ports and Special Economic Zone Ltd.