Sensex may scale 18K by year-end: Citigroup

The stock market benchmark Sensex may soar past the 18,000-points level by the end of the year, propelled by stocks belonging to the financial, capital goods, energy and auto sectors, Citigroup said in New Delhi on Monday.

"The country's rising dependence on global capital flows, and global volatility, will raise the market beta, but looking through, we raise our Sensex target index to 18,100," Citi said in a research note.

The Bombay Stock Exchange's 30 share benchmark Sensex is trading 5.69 per cent lower so far this year. The index ended today's trade flat at 16,469.55 points up 24 points, while its level on December 31, 2009 was 17,464.81.

"India is trading below its long-term PE and PBV averages (and) is no longer expensive in absolute terms, and returns are looking up too. We see the environment supporting average multiples, which suggests 8-10 per cent upside from here," the report authored by Aditya Narain said.

According to Citigroup, corporate earnings should rise 24 per cent in the current financial year (15 per cent over next fiscal).

"We get more constructive as domestic macro headwinds could well have peaked, worst on inflation, rates and the fiscal deficit possibly over," Narain said.

The country's top brokerage and investment banking firm ICICI Securities had said Sensex may scale past the 19,000-mark level this year, propelled by domestic factors like robust economic expansion and decent corporate earnings.

The only negative headwind the market can witness could be due to negative cues from global markets, but investors willing to stay invested for at least 15-18 months will not be disappointed with their returns, I-Sec managing director and CEO Madhabi Puri-Buch had said.