Citi cuts Nifty target as Middle East war turns oil shock into a bigger threat for India
Citi cuts Nifty target as Middle East war turns oil shock into a bigger threat for India
Citi Research has trimmed its year-end target for India's Nifty 50, citing mounting risks to growth and corporate earnings and as surging oil and supply shocks from the escalating Middle East war worsen the outlook for Asia's third-largest economy.
Citi has cut the target to 27,000 from 28,500 earlier, implying a 17% upside from the Nifty's last close. The brokerage also lowered the Nifty target multiple to 19x from 20x 1-year forward price-to-earnings ratio.
While India's fiscal and monetary response hinges on the conflict's duration and severity, the "earnings impact is a function of how prolonged the supply shutdown is," analysts led by Surendra Goyal of Citi Research said on Monday.
Citi estimates that three months of supply disruptions could shave off 20-30 basis points off India's growth in fiscal year 2027, raise inflation by 50-75 bps, widen the fiscal deficit by 10 bps and add $25 billion to the current account deficit.
Stocks which are hit by the Dubai Exposure are to be kept on radar