Citi upgrades India to ‘overweight’ citing stable earnings, economic growth
Citi upgrades India to 'overweight' citing stable earnings, economic growth CNBC
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India’s Stock Market Upgraded to “Overweight” by Citigroup Analysts
Introduction
Citigroup analysts have upgraded India to “overweight” from “neutral” in their emerging markets allocation. This upgrade is based on strong earnings and economic growth momentum.
India’s Stock Market Outlook
- The brokerage expects India’s blue-chip NSE Nifty 50 index to rise 7% by the end of the current financial year ending March 2025, setting a target of 23,900.
- The Nifty 50 closed at 22,055.20 on Friday, underperforming the MSCI Emerging Market Index in 2024.
Reasons for the Upgrade
- Citigroup’s view is supported by the expectation that India’s economy, the fastest growing among major peers, will remain strong with a projected growth rate of 6.8% in the current fiscal year.
- The brokerage’s estimates imply an earnings compound annual growth rate (CAGR) of 13% between fiscal years 2024 and 2026, with a stable trajectory.
- India’s one-year forward price-to-earnings (P/E) of 20x, slightly higher than long-term averages, is attributed to a stable earnings trajectory.
Sustainable Development Goals (SDGs)
The upgrade of India’s stock market aligns with several Sustainable Development Goals (SDGs) set by the United Nations:
- SDG 8: Decent Work and Economic Growth – India’s strong economic growth contributes to the goal of promoting sustained, inclusive, and sustainable economic growth.
- SDG 9: Industry, Innovation, and Infrastructure – India’s stock market growth reflects the development of robust infrastructure and the promotion of inclusive and sustainable industrialization.
- SDG 10: Reduced Inequalities – The upgrade of India’s stock market can help reduce inequalities by providing opportunities for wealth creation and economic participation.
Citigroup’s Recommendations
Citigroup remains “overweight” on India’s banks, insurers, public sector enterprises, autos, and capital goods companies. However, it recommends being “underweight” on information technology firms, metals, consumer durables and discretionary, as well as paint companies.
China’s Downgrade and Foreign Portfolio Investments
Citigroup downgraded China to “neutral” from “overweight” due to weakening fundamentals. Foreign portfolio investors have sold Indian shares since April, totaling about 191 billion rupees ($2.29 billion). China’s markets, on the other hand, have benefited from a rising share of foreign inflows.
Conclusion
The upgrade of India’s stock market by Citigroup analysts highlights the country’s strong earnings and economic growth momentum. It also aligns with several Sustainable Development Goals, emphasizing the importance of sustainable and inclusive economic development.
SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 1: No Poverty | Target 1.1: By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day | No indicators mentioned in the article |
| SDG 8: Decent Work and Economic Growth | Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% gross domestic product growth per annum in the least developed countries | No indicators mentioned in the article |
| SDG 9: Industry, Innovation, and Infrastructure | Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries | No indicators mentioned in the article |
| SDG 10: Reduced Inequalities | Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40% of the population at a rate higher than the national average | No indicators mentioned in the article |
| SDG 12: Responsible Consumption and Production | Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources | No indicators mentioned in the article |
| SDG 16: Peace, Justice, and Strong Institutions | Target 16.6: Develop effective, accountable, and transparent institutions at all levels | No indicators mentioned in the article |
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 1: No Poverty
- SDG 8: Decent Work and Economic Growth
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 10: Reduced Inequalities
- SDG 12: Responsible Consumption and Production
- SDG 16: Peace, Justice, and Strong Institutions
The issues highlighted in the article include India’s economic growth momentum, earnings projections, stock market performance, and the impact of foreign portfolio investors. These issues are connected to various SDGs related to poverty reduction, economic growth, industry development, reduced inequalities, responsible consumption, and strong institutions.
2. What specific targets under those SDGs can be identified based on the article’s content?
- Target 1.1: Eradicate extreme poverty for all people everywhere
- Target 8.1: Sustain per capita economic growth
- Target 9.2: Promote inclusive and sustainable industrialization
- Target 10.1: Achieve income growth of the bottom 40% of the population
- Target 12.2: Achieve sustainable management and efficient use of natural resources
- Target 16.6: Develop effective, accountable, and transparent institutions
The article discusses India’s economic growth, earnings projections, and stock market performance, which align with the targets mentioned above.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
No indicators are mentioned or implied in the article that can be used to measure progress towards the identified targets.
Copyright: Dive into this article, curated with care by SDG Investors Inc. Our advanced AI technology searches through vast amounts of data to spotlight how we are all moving forward with the Sustainable Development Goals. While we own the rights to this content, we invite you to share it to help spread knowledge and spark action on the SDGs.
Fuente: cnbc.com
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