BENGALURU, May 10 Reuters Citigroup analysts upgraded India to overweight from neutral in their emerging markets allocation on Friday, citing strong earnings and economic growth momentum.

The brokerage expects India39;s bluechip NSE Nifty 50 index to rise 7 between now and the end of the current financial year ending March 2025, setting a target of 23,900.

The Nifty 50 closed at 22,055.20 on Friday. The benchmark has underperformed the MSCI Emerging Market Index in 2024 so far.

Citi39;s view is underpinned by the expectation that India39;s economy the fastest growing among major peers will remain strong, growing at 6.8 in the current fiscal.

The brokerages estimates imply an earnings CAGR of 13 for FY24FY26, with the trajectory broadly stable, Surendra Goyal, managing director and head of Indian research at Citigroup, said in a note on Friday, while also attributing the India upgrade to sustained economic growth.

It also attributed India39;s oneyear forward pricetoearnings PE of 20x, which is slightly higher than the longterm averages, to a stable earnings trajectory.

The brokerage remains overweight on India39;s banks, insurers, public sector enterprises, autos and capital goods companies among others. It recommends underweight on information technology firms, metals, consumer durables and discretionary as well as paint companies.

Citi downgraded China to neutral from overweight, saying the recent rally in its stock markets occurred despite weakening…