Citigroup Inc. upgraded Indian stocks to overweight from neutral, while turning underweight on equities in Southeast Asia.
There is “meaningful upside” in Indian equities amid “less demanding” valuations, Citi said in a note. The benchmark NSE Nifty 50 Index may rise to 26,000 by the end of December, according to strategist Surendra Goyal. That implies about a 15% gain from Monday’s trading level.
Goyal had flagged limited upside in August last year amid earnings risks for the nation’s stocks.
The bullish call now comes at a time when the benchmark index has fallen about 14% from its September peak as foreigners net sold $23 billion of stocks amid concerns over slowing economic growth and disappointing earnings.
The selloff has eased high valuations to some extent, with the benchmark gauge now trading at nearly 19 times its one-year forward earnings estimates, compared with 21 times in September.
The Nifty index fell 1% to 22,574 on Monday, the lowest since June 2024.
For Citi, financials and health-care are among key sectoral overweights in the country, while remaining underweight on paints and consumer discretionary stocks.
Citi turned overweight on Chile from neutral. It downgraded ASEAN stocks to underweight from neutral on relatively weak earnings-per-share momentum and growth forecasts.
