Citigroup has downgraded its year-end target for the BSE Sensex by nearly 10 percent to 19,700 from 21,500,citing weak market environment,heightened uncertainty and lower earnings. "India will also likely lag any sharp global bounce-back," the Wall Street bank said in a note,adding that the current dip and rally will be much shallower than the 2008 recessions. The benchmark BSE index has fallen 16.5 percent year to date. The house says that it expects India's negatives - high valuations,inflation,the central bank's tight monetary stance,GDP downgrades and an apparent policy paralysis-may have already peaked. "In fact,with lower global growth and commodity markets,most of these headwinds could well turn into tailwinds," it said. Citi,however,expects a 15 percent upside from current Sensex levels which is currently trading at 17,154.39 at 12.10 p.m.. Citi has revised its model portfolio for India saying it was bullish on banks and autos. Citi raised the auto sector to 'overweight' from 'underweight' and maintained its 'overweight' rating on the banks,telecom and pharmaceuticals while it cut metals to 'underweight' from 'neutral' and reduced real estate to 'neutral'. It also cut 'overweight' rating on energy and the gas space to a neutral,with an increase in bias toward the oil marketing companies.
