In January, RBS had made year-end estimate of 7,700 points for the Nifty, but has revised it upwards citing the prospects which the economy holds for a bull run.

"We expect the investor interest, especially from the foreign institutional investors to continue, and events like the budget will only help. We have a year-end target of 8,650 for the Nifty," RBS chief investment officer Rajesh Cheruvu told reporters.

He said that with growth bottoming out, deficits on current account and fiscal fronts under check and relatively cheaper valuations vis-a-vis the developed world, India is at a 2003-like scenario, which had led to a long bull run.

Cheruvu said that apart from the reform measures undertaken by the Narendra Modi-led BJP government, lack of any credible alternatives within the emerging markets also make India a favourite for global money.

In terms of investment destination, China is bottoming out, India's position is improving while Brazil and Russia are declining, RBS's chief economist Mark McFarland said.

The July 10 Budget of Finance Minister Arun Jaitley will not offer strong measures on the fiscal consolidation front as the BJP-led Government approaches elections in important states like Maharashtra, but will be a growth oriented one, Cheruvu said.

"On the fiscal consolidation front, I think the Budget will have to continue with the subsidies but offer comfort to the market through the stress on discipline," he said.

However, he was quick to add that investors, who generally seek steps on fiscal prudence, will be sensitive to the compulsions of the government and their interest will not be dented.

On the monsoon, Cheruvu said that in the likelihood of the El Nino (climate phenomena) factor playing out, the RBI is unlikely to meet its January 2015 target of containing retail inflation at 8%.

The supply side measures being undertaken by the government will bear fruit in 15-18 months and the inflation will come down to the 6% target set by RBI by January 2016, he said.

McFarland said that he expects the rupee to trade at around 58 level against the dollar till June 2015.

He said the revival in the US, a key market for Indian exports, bodes well for the country.

PTI