Citi raises Dec 2015 Sensex target to 33,000, Nifty 9,850

Citigroup today raised the December 2015 Sensex target to 33,000 and that of Nifty to 9,850.
According to the global financial services firm, a possible decline in key interest rate, coupled with rising economy, is likely to set the market on fire.
"We expect 2015 to be a good year: we raise December 2015 market targets, Sensex-33,000 and Nifty (9,850)," Citigroup said in a research note today.
Stock markets have seen significant gains in 2014 and the benchmark sensitive index (Sensex) has gained gained 7,268.23 points or 34.33 per cent so far this year.
Citigroup said stock markets generally see the best gains during the time leading leading into rate cuts and during the early stage of policy rate cuts. Since the rate engine is expected to "fire" now and in early 2015, making the market sentiments look bullish.

Citigroup said that policy rates are likely to fall 75 bps in 2015 and since there is a downside risks to inflation, and there could be more rate cuts.

"2015 should be front-loaded with falling rate gains, back-loaded with an actual economic /investment recovery; and accompanied by steady regulatory/execution reform," the Citigroup report said.
The report further noted that "while the India train has momentum, there are risks like high ownership and valuations. In addition, rapidly falling commodity prices have started becoming too much of a good thing, it said.
The 30-share benchmark index Sensex today fell 134.37 points to end at 28,559.62 and Nifty slipped from record-high and closed 32.35 points down at 8,555.90.