Citi cuts its year-end forecast for India's stock exchange nearly ten per cent

Source: Yahoo

Citi Bank has cut its year-end forecast for India’s Sensex stock exchange by nearly ten per cent, to 18,900 from 20,800. The index currently stands at around 18,297.

Citi downgraded Indian banks to neutral, but upgraded pharma, telecom, energy and IT sectors to "overweight".

JP Morgan has also downgraded Indian shares to "neutral" from "overweight", citing a strain in the balance of payments, and warned that India would continue to underperform if the rupee falls lower. It also upgraded its Chinese shares to "neutral" from "underweight".

This comes as fears of a slowdown pushed the rupee to a record low yesterday. Yields on India's ten-year debt rose past nine per cent for the first time since late 2011.

Since the beginning of June, international investors have pulled $11.58bn in shares from the markets, according to official data.