Investors' pessimism overdone, Sensex to hit 22500 by Dec 2013: Deutsche Bank - The Economi...

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You are here: ET Home Markets Analysis 25 MAR, 2013, 01.46PM IST, ECONOMICTIMES.COM

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Investors' pessimism overdone, Sensex to hit 22500 by Dec 2013: Deutsche Bank
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NEW DELHI: Indian market have underperformed many of its EM peers year-to-date, but Deutsche Bank says investors' pessimism is overdone and sees December 2013 Sensex target at 22,500. Deutsche Bank's top picks include Axis Bank and Ultratech Cement , BoB, Larsen & Toubro, Maruti Suzuki India, PNB . , Reliance Industries , TCS

After outperforming its Asian peers in the 2012, the S&P BSE Sensex has corrected nearly 3 per cent so far in the year 2013, underforming its Asian and EM peer group as on March 25. Investors have of late become nervous and negative, fearing the government's inability to meet its FY14 fiscal deficit target and restoring the capital expenditure cycle and GDP growth trajectory, the global investment bank said in a report on Sunday titled 'India Equity Strategy'. "During the most recent parliament session, which witnessed a key ally withdraw support, the above mentioned fears were accentuated," said the investment bank. Cautious investors exited long positions following concerns over stability of UPA government after the DMK pulled out of the ruling coalition. The market is now down 7 per cent since touching its 52-week high in December, with valuations now at 13.3x or 14 per cent discount to its 5-year trading average. FIIs have injected nearly $34 billion since January 2012, which led to multiple expansions, while earnings growth remained flat, HSBC Research said in its earning season analysis. The S&P BSE Sensex rose 26 per cent on the back of strong FII flows in calendar year 2012. FIIs inflow in Indian markets stood at $24 billion, taking FII ownership to record levels. Indian markets rose on the back of reform process initiated by the government since September 2012, which fueled strong foreign inflows into India. The government's commitment to decisively move ahead on policy is exhibited from the fact that despite apprehension over policy taking a backseat, the calibrated, monthly increase in diesel prices has taken place. "The latest announcement to rationalize FII investments in debt is yet one more piece of evidence of the government's intent to liberalize foreign inflows," Deutsche Bank said.

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Investors' pessimism overdone, Sensex to hit 22500 by Dec 2013: Deutsche Bank - The Economi...

http://economictimes.indiatimes.com/articleshow/19188449.cms?prtpage=1

The global investment bank firmly expects the government to use capital formation and accelerated FDI approvals as key vehicles to raise the GDP growth trajectory. Top picks from the investment bank: Stock Axis Bank Bank of Baroda Larsen & Toubro Maruti Suzuki India Punjab National Bank Reliance Industries TCS UltraTech Cements RecommendationTarget Price Buy Rs 1670 Buy Rs 1050 Buy Rs 1925 LtdBuy Rs 1800 Buy Rs 1100 Buy Rs 1040 Buy Rs 1670 Buy Rs 2600

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