Morgan Stanley on Indian Market: The record boom in the stock market before Diwali continues. The market is setting new records every day. This market rally is going to continue. Morgan Stanley has said in its report that the Sensex can reach 50 thousand by December 2021. According to the report, in 2021, midcap and smallcap will be seen faster than Lorgecap. The global brokerage firm had previously given a target of 37300 by June 2021. It now estimates a 15 percent increase from current levels. Morgan Stanley believes the market will gain further momentum.
Global brokerage firm Morgan Stanley has also raised earnings per share (EPS) estimates for the BSE Sensex to 15 per cent, 10 per cent and 9 per cent in FY21, FY22 and FY23.
Midcap performance will be better than LogCap
According to Morgan Stanley equity strategists Rhythm Desai and Sheela Rathi, the broad market, including midcap and smallcap, may outperform LORGCAP in the coming year. With the return of the growth cycle, the profitability of companies will increase and the market cap of the market will increase. He has written that the peak of Covid-19 infection has passed. Now high-frequency growth indicators are looking strong. Government policy has been better, business activity is increasing in Indian companies. In this way, the possibility of better growth has been strengthened.
Bull and beer case
In the bull case, where the condition of the virus improves, there is a sustained recovery in growth and if the global steamulus asset price is supported, then the Sensex can see a level of 59 thousand by the end of 2021. Similarly, if the virus spreads at a rapid pace in 2021 in the Bearish case, if the government policy is not implemented properly and the growth stumbles, then the SENSEX can see a level of 37 thousand.
Attractive Indian market
According to the report, the Indian stock market is looking attractive compared to other emerging markets. Earning cycle has improved, which has increased attraction. The report says that in this way, the better-earning cycle and policy moments will attract investors in the market. Morgan Stanley recommends buying rate-sensitive shares with shares of strong domestic companies. According to the report, there is a possibility of staying focused on midcap and smallcap in the coming days. Their valuations look attractive relative to GDP and money supply. Their performance may be better than large-cap stocks further.
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