Weak corporate earnings as well as low investments by foreign investors into India-focused funds could bring lanugo the Sensex in the near term, its Chief Executive for Institutional Equities Saurabh Mukherjea said.
"There is a upper probability that we will see the Sensex at 22,000 level in the foreseeable future," he said.
The Sensex, which began the year at 26,160.90 level, has shed nearly 1,400 points or over 5 per cent pursuit renewed worries over the health of Chinese economy, which forced both the World Wall and IMF to lower their global growth outlooks.
The market has fallen plane unelevated the levels when Prime Minister Narendra Modi was sworn in on May 26, 2014 and sealed 2015 with a 5 per cent loss, a first in the past four years.
On the economy, the brokerage said, "GDP growth is likely to remain under pressure in the firsthand term and we expect GDP growth to be at 6.8 per cent for the current fiscal."
In an unusual observation, the brokerage said the government's warlike woebegone money momentum is impacting GDP growth in the short term.
"Prime Minister Narendra Modi's crackdown on the woebegone economy and an overhaul of the subsidy mechanism are likely two key developments adversely impacting GDP growth in the short term," the brokerage said.
It widow that the economy has been unceasingly losing momentum for the past many quarters.
"Our wringer suggests that production of coal and cement, two-wheeler sales, rural wages, electricity generation, non-oil wall credit and wall deposits are in fact losing steam," Mukherjea said.
He widow that low railway cargo volumes, stagnant electricity consumption and poor credit offtake are moreover reflective of the deeper slowdown.
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