Citigroup lowers Sensex's year-end target

The sharp fall in the American markets, which pulled down most of the regional markets including India, have prompted Citigroup to lower the year-end target for 30-index Sensex by nearly 10 percent.

Citigroup, one of the strongest Wall Street investment banks, the targets the Sensex to fall to 19,700 from 21,500, citing weak market environment, heightened uncertainty and lower earnings.

"India will also likely lag any sharp global bounce-back. the current dip and rally will be much shallower than the 2008 recessions," it said in a research report to its clients.

The benchmark sensitive index or Sensex of the Bombay Stock Exchange has fallen 16.5 per cent so far this year.

Citigroup said that it expects high valuations, inflation, the RBI's tight monetary stance, GDP downgrades and an apparent policy paralysis--may have already peaked.

"In fact, with lower global growth and commodity markets, most of these headwinds could well turn into tailwinds," it said.