Goldman sets Nifty target at 12,500; wants govt to carry out 4 key reforms

Goldman Sachs also expects the banking system's liquidity situation to normalise as currency in circulation reduces and potential liquidity operations are carried out by RBI

Global research and brokerage firm Goldman Sachs has pegged the Nifty50 target at 12,500 over the medium term and sees mid-teens growth in earnings, which it says is likely to drive the index towards the target.

The Nifty50 index hit the 12,000-mark for the first time ever on Thursday, after the outcome of Lok Sabha elections 2019 brought the Narendra Modi-led National Democratic Alliance (NDA) back to power for a second consecutive term.

"We are overweight on Indian equities and expect Nifty to continue its outperformance relative to the rest of the region. Current equity valuations at 18.4x forward earnings