Indian equities will bottom-out only in August or September and the 50-share benchmark Nifty will fall by another 6 per cent to 14,500 points by the end of this year, an American brokerage said on Wednesday.

A cut in companies' earnings as the advantage from cheaper inventory buffer wears off, continuing headwinds on crude oil prices and "vulnerable" valuations of Nifty stocks even after the recent correction were cited by BofA Securities as the factors which will drag down the markets. The brokerage had initially estimated the Nifty will rise to 19,100 by the end of the year and revised the target down to 17,000 after the sell-off.

The benchmark, which closed 1.44 per cent down at 15,413.30 points on Wednesday, has been losing ground over the past few weeks, driven by factors like monetary policy tightening globally and higher commodity prices following the Russian invasion of Ukraine.

"We are cautious on markets despite the recent market correction. In addition to globally tightening monetary conditions and a slowing economic outlook, including fears of a recession in the US, we see other risks," analysts at the brokerage said.

Other factors driving the brokerage to be cautious include earning cuts of up to 4 per cent with the risk of more downgrades and crude prices, which it said can spike to USD 150 per barrel.Meanwhile, the brokerage said the rupee will depreciate beyond its own expectations to Rs 81 against the US dollar by the end of 2022.

The rupee slumped 21 paise to a record low of 78.35 against the greenback on Wednesday.

"We believe the risks are still skewed towards more depreciation for the rupee as the fundamental outlook has deteriorated further primarily due to higher oil and other commodities," it said.

However, the analysts were quick to add that the RBI's reserves of nearly USD 600 billion will be a mitigating factor against the risks.