Sensex likely to hit 16,000 level by December

MUMBAI: Global research firm Citi on Monday said the benchmark index Sensex is likely to hit the 16,000 mark by December this year, with a robust growth in revenue of the corporate India.

"We are positive on Indian equities over the next 6-12 months and expect the growth to remain robust. We have a target of 16,000 for December and 17,500-18,400 for December 2008," Citi Investment Research India head Ratnesh Kumar said in its latest report.

The Sensex touched the intra-day high of 15,000 on last Friday.

In the first half of the year, the market had lagged its regional peers due to jitters caused by inflation, rate hikes, tightening liquidity and currency appreciation, even though it bounced back from March lows and is up 7.8 per cent so far in 2007.

"But the worst is over on these concerns now. We also expect the central bank to take fewer market dampening actions over the next 6-12 months," Kumar said.

Inflow of funds has made a significant rise and foreign institutional investors have already brought 1.81 billion dollars this month, compared to four billion dollars in the first half of the year, he added.

However, the research firm cautioned that this year growth in the stock market would be less spectacular than recent years.

On the earnings side, Citi forecast a fat revenue figure to adorn corporate India's books on the back of rapid economic growth though the performance might not be that spectacular.

Despite a high base 25-30 per cent earnings for the last five consecutive years, Citi continues to see solid earnings growth in India.