Goldman Sachs downgrades sluggish Indian economy to underweight
August 01, 2013
New Delhi, 1 August 2013
Global investment bank Goldman Sachs on Thursday downgraded India to “underweight” on concerns about delayed growth recovery and rising vulnerabilities for the economy. “Recent activity data in the second quarter of 2013 has been sluggish with no signs of a pick-up in investment demand… Against a backdrop of lower growth, tighter liquidity and rising macro vulnerabilities, we downgrade India to underweight,” Goldman Sachs said in a statement.
“We lower our NIFTY 12-month target to 6200, implying 7 per cent upside in local FX with potential downside risks from rupee weakness. We see limited room for re-rating unless macro conditions turn favorable,” added Goldman.
The global investment bank expects the rupee to remain under pressure and the RBI may keep liquidity tighter for the next 3-6 months.
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