May 16, 2012, 02.24 PM IST
The Bank of America-Merrill Lynch says expects the Sensex to drift to its 15,000 target given economic growth and current account concerns. It adds business confidence is below the Lehman crisis levels.
"While valuations are below long term averages, the market has been de-rated as India's growth momentum is at 10-year low and the twin deficits too are the worst in over a decade," BoA-ML analysts say.
The bank adds "a meaningful recovery" is unlikely until the government undertakes reforms.
But BoA-Merrill adds oil prices could provide near-term relief, saying a USD 10 per barrel decline in oil reduces India's current account deficit by 0.4% of GDP and the fiscal deficit by 0.2% of GDP.
Also read: Will Indonesia replace India in the BRICs?
News driven market breaks previous high of 6212; Nifty in uptrend, may surprise on upside if actual election results are supportive
The impact of the exit poll in the stock market is favourable for the bulls. The result of exit polls has led to sharp up move in the market. The theme is intact that trades will make more money on the long side. The same theme is intact in the Bank Nifty. After a narrow range Bank Nifty opened with gap and closed on the top.
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