New Delhi: Global brokerage UBS has set the Nifty target at 8,800 by 2017-end and noted that risk-reward ratio for the investors is not yet attractive in the near term.


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The global financial services major said that its Global Emerging Markets (GEM) strategist remain 'overweight' on India, while its Asia Pacific (APAC) strategist has 'neutral' stance.


"We have an end-2017 Nifty target of 8,800. Our upside/ downside scenarios of 9,700/6,400 suggest the risk-reward is not yet attractive near term," UBS said in a research note.


Regarding the wider-than-usual range for the Nifty upside and downside, UBS said it reflects heightened uncertainty around potential outcomes.


"We think Uttar Pradesh elections will be a key event for markets though, given investors' common concern about Modi's political capital post demonetisation," the report added.


Though markets are expected to witness near-term disruption from demonetisation, a gradual recovery thereon appears priced in.


"Nifty has only marginally underperformed GEM since demonetisation. Our discussions with investors suggest they expect the impact to be short-lived and only a select few have trimmed exposure to affected sectors like discretionary, non-bank financial companies (NBFCs), cement and autos," UBS said.


Going forward, the upcoming implementation of the Goods and Services Tax (GST), and effects of demonetisation, are likely to remain a drag in 2017.


As per UBS' base case scenario, the negative impact of the latter to last only until the fourth quarter of 2016-17.


"An earnings growth pick-up in the second half of 2017-18 off a low base, rate cuts and the hope of a growth recovery in 2018 may help market performance, likely more so in second half of 2017, in our view," it added.


The wide based Nifty is currently hovering around 8,200 level.