Citigroup Upgrades India’s Market Prospects, Predicts NSE Nifty 50 Index Growth Amid Strong Economy and Earnings Momentum

According to recent reports, Citigroup has increased its stance on India’s market prospects by upgrading it from “neutral” to “overweight” in their emerging markets allocation. This decision was based on the strong performance of India’s economy and earnings momentum, with the brokerage predicting a 7% rise in the NSE Nifty 50 index before the end of the current financial year. Citigroup’s estimates suggest a stable earnings trajectory for the following years, with an earnings compound annual growth rate (CAGR) of 13% from FY24-FY26. The managing director and head of Indian research at Citigroup, Surendra Goyal, acknowledged that India’s fast-growing economy, currently the strongest among major peers, contributed to this decision. As a result, the brokerage continues to favour investments in banks, insurers, public sector enterprises, automobiles, and capital goods industries, while recommending “underweight” positions for information technology, metals, consumer durables, and discretionary as well as paint companies. Meanwhile, Citigroup has downgraded its position on China’s market due to weakening fundamentals, despite a recent stock market rally. Foreign portfolio investors have also sold Indian shares since early April, but China’s markets have benefited from a rising share of foreign inflows due to lower valuations compared to India’s. In contrast, global brokerage Jefferies has raised China’s weighting in its Asia Pacific ex-Japan relative-return portfolio. Citigroup maintains its “overweight” stance on Taiwan and Korea while keeping a “underweight” position on Latin American countries.