Lowering its 2015-end Sensex target to 32,200 points, global brokerage Citigroup on Thursday said investors' faith in Indian markets is turning fickle amid a growing perception that the government has got 'little logjammed' on various reform measures.
The year 2015 is turning out to be very different from 2014 for Indian investors.
The Indian market has disappointed on both its growth trajectory and that of earnings.
Moreover, it has seen some days of outflows.
The brokerage said it remains 'positive' on India, and has adjusted down its Sensex target to 33,200 from (33,000 earlier) for December this year.
It expects Sensex to be around 35,000 by June 2016.
"Our equivalent Nifty targets are 9,760 for December 2015 and 10,600 for June 2016," it said.
The 30-share BSE index has gained just 338 points so far this year and is hovering around 27,800 points.
It had registered a gain of over 30 per cent in 2014.
According to Citigroup, there are five fundamental 'faith tests' that the Indian market faces -- growth, interest rates, inflation, foreign/domestic flows and government performance.
"We believe you should 'Keep the Faith' on these five and India -- even though Investors' faith in India currently is a little fickle," Citigroup said.
On the performance of the Modi government, a year on, the report said there's some push back on govt delivery, and some hold-ups (like GST, Land, MAT).
"We would rate the government fairly favourably: a lot delivered, some very aggressively (like coal), and a few well beyond expectations," Citigroup said, adding that "the government should continue to add value: to the economy and market".
A stock trader reacts; Photograph: Reuters
