Goldman Sachs bullish on Indian equities, thanks to Modi mania

Goldman SachsJoining the Modi bandwagon, Goldman Sachs on Tuesday raised its target for Nifty to an impressive 6,900 for the end of 2014, citing optimism that Narendra Modi-led main opposition party BJP could throw up a surprise in the next year's elections.

In its latest report titled `Modi-fying our view: Raise India to marketweight,' the global investment bank upgraded India's rating to `marketweight' citing Modi's winning chances along with other micro and macroeconomic indicators.

It may be noted here that `marketweight' stands for investment grade in layman's jargon.

Goldman Sachs' target of 6,900 for Nifty implies a potential increase of 10.34 per cent in the National stock Exchange (NSE) benchmark over Tuesday's close of slightly more than 6,253 points.

In the report, Goldman Sachs also said that external capital account pressures have showed considerable moderation, while the economy has shown signs of a cyclical lift up and structural improvements. It also noted that the economy's earnings outlook is showing signs of stabilization.

Goldman Sachs is not the only global bank bullish on Indian economy. In a recent note, UBS said, "Based on our discussions with investors, markets are positively inclined towards the Narendra Modi-led BJP and less so towards the Congress, despite some course correction in policies recently by the latter."

Meanwhile, Nifty has gained 5.9 per cent in CY13 and is up 12 per cent since September this year.