Deutche ups its India outlook, but warns of supply constraints

Deutsche Bank has set the fiscal year-end target for India's S&P BSE Sensex at 33,000 and for the NSE index Nifty at 9,936, saying that rising public investment is likely to emerge as key market catalyst in 2015.

Deutsche Bank had earlier set a target of 29,000 for the Bombay Stock Exchange's Sensex.

The bank feels the government will address supply-side constraints in the economy and reallocate spending from consumption to investment over the year.

''In 2015, we see India harnessing its commodity pricing dividend to realign policy towards an investment-driven macroeconomic stabilisation,'' Deutsche said, adding that the economy is overweight on financials, industrials, and materials, while being underweight on consumer staples, IT services and telecom.

Axis Bank Ltd, Godrej Consumer Products Ltd and HDFC Bank Ltd are among the top large-cap picks of the bank. Key mid-cap picks include Bharat Forge Ltd, CESC Ltd, Cummins India Ltd and Gujarat Pipavav Port Ltd.

For the Sensex index, Deutsche had earlier set a target of 29,000 for March 2015.

The report asks the government to address supply-side constraints in economy and reallocate spending from consumption to investment.