Global brokerages such as CLSA as well as Morgan Stanley have cut their year-end target for Sensex, while investment banking major Credit Suisse has expressed concern that India's global linkages are actually higher than what it was in 2008.
CLSA has cut its year-end Sensex focus on to 18, 200 from the earlier 19, 500. Morgan Stanley, on additional hand, has reduced it target for 2011 by as much as 15% in order to 18, 850 from 22, 750.
So far this year, Sensex has dropped massive 23%. It is down 25% from November high of 21, 108. sixty four. The Indian equity market is also one of the worst performing among its global peers this season.
Going by the their research reports, tough days are ahead for the Indian equity market as they believe that at any given time when developed economies are barely growing despite stimulus, India cannot remain insulated in the whole picture.
"India's global linkages are now higher than in 2008. All of us believe slowing global growth will expand the trade deficit and hurt GROSS DOMESTIC PRODUCT growth, " Credit Suisse said.
It further added that import volumes with regard to India would stay resilient, export volumes will not -- which in turn will expand the trade deficit and hurt GDP growth from the country.