Getty ImagesNEW DELHI: Morgan Stanley has revised its BSE Sensex target upward to 50,000 points by December 2021 in the base case scenario, saying that the coming growth cycle is not fully priced in. The overseas firm had earlier projected the 30-share index target at 37,300 by June 2021.
The target indicates an upside of nearly 14 per cent from the current levels of around 43,890. At the same time, Morgan Stanley believes that the broader market is likely to outperform large caps in 2021.
“Concentration of market cap and profits may have peaked with the return of the growth cycle. We also think portfolio returns are more likely to be driven by bottom-up stock picking rather than top-down macro forces, so keep sector positions narrow. Return correlations across stocks with the equity market have risen to levels from where they tend to mean-revert,” Ridhan Desai and Sheela Rathi of Morgan Stanley said.
In a research note on November 15, they added domestic cyclical would outperform exports. Rate-sensitive and consumer stocks are also likely to outperform, whereas energy should underperform.
“We add another 100 basis points to financials at the expense of healthcare and also added SBI to our focus list while removing Apollo Hospitals. We are overweight in consumer discretionary, industrials, financials and utilities. We are underweight in technology and energy,” they said.
In the bull case scenario (probability 30 per cent), Morgan Stanley believes that the Sensex can hit 59,000 by December next year, while it would be around 37,000 in the bear case (20 per cent probability).
The target indicates an upside of nearly 14 per cent from the current levels of around 43,890. At the same time, Morgan Stanley believes that the broader market is likely to outperform large caps in 2021.
“Concentration of market cap and profits may have peaked with the return of the growth cycle. We also think portfolio returns are more likely to be driven by bottom-up stock picking rather than top-down macro forces, so keep sector positions narrow. Return correlations across stocks with the equity market have risen to levels from where they tend to mean-revert,” Ridhan Desai and Sheela Rathi of Morgan Stanley said.
In a research note on November 15, they added domestic cyclical would outperform exports. Rate-sensitive and consumer stocks are also likely to outperform, whereas energy should underperform.
“We add another 100 basis points to financials at the expense of healthcare and also added SBI to our focus list while removing Apollo Hospitals. We are overweight in consumer discretionary, industrials, financials and utilities. We are underweight in technology and energy,” they said.
In the bull case scenario (probability 30 per cent), Morgan Stanley believes that the Sensex can hit 59,000 by December next year, while it would be around 37,000 in the bear case (20 per cent probability).
Read More News on
Download The Economic Times News App to get Daily Market Updates & Live Business News.
Also Read
3 Comments on this Story
 | Simplysuperb30 minutes ago The Psychology of Money amzn.to/317sAG5 |
 | Harekrishnarama 31 minutes ago These big banking groups can do what they want with india - we are their puppets- they can take the sensex down to 20000 or make it 100000- it all depends on their masters in the deep state - they can invent a covid scam and destroy us or create another war and again pull us down - best is to keep our savings in fixed deposits, or gold or real estate or debt funds- let us not gamble our savings on such predictions - |
 | Suresh Kamath1 hour ago When the Market is on the BOIL as of these present times all EXPERTS would reach SKY LEVELS and Predict the All time PEAK and yet seem to NEVER get their Figures right as EVER.Investors surely have their Right Views and keep their Heads and be Alert always and NEVER fall in Traps of such WILD Guess and play their Cards SAFELY and with due Diligence |