Citigroup Market Outlook 2020 || Expects Small Upside for Equities
Citigroup Market Outlook 2020 key points are provided below. There are only a few days left for the year 2019 to end. So top brokerages are coming out with their macro and equity outlook for 2020.
Coming to equity outlook, it anticipated that there would be a slow recovery and high valuations indicating a moderate upside for equities in 2020. If there is a quantitative easing from global central banks and any trade war resolution then the equities likely to see some upside However, as per the brokerage, the upside would be limited.
Citigroup Market Outlook 2020
Citigroup expected only a 5 per cent upside for Nifty in December 2020. The target they have placed for Nifty is at 12,700. On the Asia outlook, the brokerage expressed that the Asian markets will have a moderate return in 2020. However, within that India will withstand as a key overweight market for the group.
The Citigroup Market Outlook 2020 also showed that there would be an earnings recovery across large-caps, mid-caps, and small-caps. The brokerage group is overweight on the sectors such as financials, healthcare, and industrials, On the flip side, it is underweight on the sectors including consumer staples, materials ex-cement, and autos.
In terms of macros, the brokerage expects a modest cyclical recovery in GDP growth likely to be 5.9% in FY21. Besides, the inflation likely to be below 4% which is below the RBI target despite the recent food inflation. While the fiscal deficit/GDP probably fall to 3.6% in FY20.
With regard to rate cuts, it believes there will be two 25 bps rate cuts in the months of April and June. Also, the brokerage group said USD-INR would be in the range of Rs70-72 to the dollar in case of active RBI intervention. By and large, Citigroup Market expects moderate returns and earnings recovery in 2020.