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Goldman Sachs upgrades India to ‘Overweight’ : NSE likely to reach 12500; Projections based on Big BJP Win

In a Major boost to the Indian Economy and projected growth in Indian Markets, Goldman Sachs (GS) upgraded its view on India to “overweight”. This gives a great fillip for the BJP to project the India Growth Story as the country has high expectations for a stable and positive platform for a flourishing Economy. This is in line with the projection of several ongoing surveys for another term for the Bhartiya Janata Party led Government headed by Narendra Modi.

India goes to vote in a mega exercise which begins next month on April 11th, which will culminate with the counting all over the country on May 23. Hopes for deeper economic reforms and more monetary policy easing have helped bring back foreign investors to India.

FDI into Indian equities soared to their highest in 15 months at $2.42 billion in February,which was a major swing compared to the 2018’s net outflows of $4.4 billion.This result turns favourable for India once again, the analysts from Goldman Sachs said in a note dated Monday. Investors have started to place their bets for a stable government, especially after India’s tensions with its nuclear-armed neighbour have slightly allayed.

India sees signs of an uptick in demand leading to better-than-expected earnings season for the December quarter and pick-up in foreign flows led the brokerage to upgrade their view. This Upgrading is in sharp contrast to the downgrading India to “market weight” by GS in September, citing near-term risks related to macro factors and earnings, stretched valuations and election-related uncertainties.

The upgrading by GS now projects India’s NSE index to reach 12,500 level in the next 12 months, up from its previous projections of 11,700. This had hit a record 11,760 in August and has already seen a Jump of 5.5 percent so far this year. It was trading 0.06 percent higher at 11,468.60 on Tuesday. The brokerage also upgraded its view on state-run banks, industrial and auto sectors to “overweight”. However, it downgraded technology, metals and non-banking financial sectors to underweight.

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