Goldman Sachs upgraded Indian shares to "overweight" from "marketweight" and raised its target on India's NSE index to 7,600, citing reduced external vulnerabilities, including a narrowing current account deficit, and potential for gains ahead of elections that conclude in May.
* NSE earlier rose as much as 1.1 percent to a record high of 6,574.95. Markets were closed on Monday for a public holiday.
* The investment bank added it favours cyclicals over defensives because of expectations of an improving economy and a bottoming out of earnings, according to a report dated on March 14.
* It also recommended investors to focus on potential election beneficiaries in these markets.
* It upgraded auto stocks to "overweight", while retaining the same rating on IT and energy stocks.
* Goldman said Oil and Natural Gas Corp, Coal India , NTPC and Bharat Petroleum Corp as public sector companies that could be key election beneficiaries.
* Among private sector shares, ICICI Bank, Larsen and Toubro, UltraTech Cement, JSW Steel , Indusind Bank NS> and Voltas were seen by Goldman as gaining from elections.