The brokerage said it expected corporate earnings to turn around.
'Experts are not ruling out further pain as global factors cannot insulate India from the aftermath.'
The beleaguered Deutsche Bank announced major overhaul of its business, which included discontinuing loss-making equities trading business, creating a new 'bad bank', and cutting 18,000 jobs. Deutsche Equities India employs 35 people, all of whom could face the job axe.
The brokerage, which previously had a target of 31,000, cited global growth concerns for revision in the target.
'...and defensive until the global macro headwinds turn more benign.'
Deutsche Bank expects the Sensex to climb only 8% in 2017 to 29,000, and expects high volatility.
While analysts predicted the Sensex to cross 30,000 in 2016, the index currently stands 12% lower at 26,400.
Brent crude prices fell to $57 a barrel on Monday from $62 a barrel.
Both Sensex and the rupee posted slight gains on Monday but Brexit concerns lingered.
Further outperformance hinges on pickup in industrial activity, buying by local investors.
Continued outflows amid moderation of domestic investments are a concern
US Fed rate rise raises risk of further drying up of FII flows.
It won't be an easy ride for the markets, reckon experts, considering the multiple state elections in 2018 and general elections next year.
They have put in $14 billion so far in 2014 but this could get slower if the US Fed raises rates; however, there are expectations on compensatory flows.
Analysts agree China, Greece and US Fed developments need careful monitoring but India should gain, over time, from relative rise of the dollar and fall in commodity prices.
The fuel reforms are a very important signal of the government's commitment to tough economic reforms.
Global markets could correct 5-10 per cent. If that happens, Indian markets will correct about 10 per cent
The derivatives expiry on Thursday is also expected to add to the volatility.
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