Goldman Sachs, NIFTY saw a Friday rally, closed at 4888, down 1.1% wow

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NIFTY saw a Friday rally, closed at 4888, down 1.1% wow
 All India local sectors ended in red for the week. Public Sector Banks closed down 5.6% wow
 Ytd foreign outflows of US$ 556 mn and domestic inflows of US$ 5.6 bn as of close of Oct 05, 2011
 Our economics team has revised down their GDP growth forecast to 7.0% for FY12
 We lowered our Sep-2012 target for NIFTY to 5900, and now expect CY 2012 EPS growth of 10%
Overview
NIFTY lost 1.1% during the week with all sectors
ending in red territory. CNX Public Sector Bank
index (-5.6% wow) was the major underperformer
after Moody’s downgrade of SBI rating. Our
economics team revised down their FY12 GDP
growth forecast for India by 30 bp to 7.0%. This is
primarily due to weaker external demand in the
US and EU. We lowered our 12 month NIFTY
target level to 5900 and now expect 2012 EPS
growth to 10%.
NIFTY price performance
NIFTY lost -1.1% wow, down 20.3% ytd
Source: NSE, DataStream, GS Global ECS Research.
Foreign and domestic flows
Foreign investors sold US$ 481mn wow while DIIs
bought US$ 261mn wow (as of Oct 5, 2011). Now
FII Net Sell stands at US$ 556mn ytd while DIIs are
Net Buyers of US$ 5.6bn ytd.
Earnings sentiment
MSCI India Telecommunications saw the weakest
EPS sentiment (-7.2% wow). MSCI India is trading
at 12.6x times 12m forward earnings at a premium
of 29% to MXAPJ.
Commodities
Commodity lost 2.2% wow. Agriculture (-3.6%)
and Energy (-3.2%) underperformed wow. Guar
seed was the major underperformer (-8.8% wow).
Focus
Monsoon Monitor