Global brokerage firm UBS has cut its Nifty target for December this year to 9,200 from 9,600 amid slower-than-expected recovery in growth.

According to the global financial services major, the bullish trend in the Indian markets over the last one year was mainly driven by “positive surprise on rate cycle, lower oil prices and reforms news-flow” but hereon, actual earnings and macro data points would matter increasingly.

The revised target also reflects our view of the growth recovery being slower-than-expected, as is playing out in quarterly corporate results.
– UBS Head of India Research, Gautam Chhaochharia said.

According to the brokerage firm, India remains overweight (OW) from Asia and emerging market perspective but there is a possibility of near-term consolidation and even profit-taking, given limited absolute upside from current levels in the near term.

“The reality of a slow growth recovery is now being acknowledged and earnings estimates for FY15/16 have been cut 6-7 per cent over last 6 months - recovery is yet elusive,” Chhaochharia added.

According to the brokerage firm, the fourth quarter of FY15 is expected to be weak but “markets may be arguably already expecting that, based on our discussions with investors”, UBS said.

Sector-wise, the brokerage is “overweight” on banks as it believes that the rate cycle would be a bigger driver for these stocks rather than credit growth in near-term. The brokerage is also overweight on coal, oil & gas/ petrochemicals, pharmaceuticals and telecom & media.

The Nifty is currently hovering around 8,400-level.