SENSEX NIFTY
May 16, 2012, 02.24 PM IST | Source: Reuters

Indian stocks at risk of 'de-rating': BofA-Merrill Lynch

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.

Indian stocks at risk of 'de-rating': BofA-Merrill Lynch

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.

Also read: See 4500 on Nifty in 8-12 months, says Prabhudas Lilladher

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?

ADS BY GOOGLE

video of the day

Global GDP may rebound from 2.5-3% by next year: JP Morgan

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.