Analysts see Sensex hitting 55,000-mark by December

Buoyed by Budget proposals, the S&P BSE Sensex surged over 3,500 points in two sessions to reclaim the 50,000-mark intraday on Tuesday. Analysts at various brokerages remain bullish on the Indian markets, with those at Morgan Stanley expecting the Sensex to hit the 55,000-mark by December this year — an upside of around 10 per cent from the current level.

A very gradual fiscal consolidation glide path with looserthan-expected fiscal policy, good quality spending mix and reasonable assumption on fiscal math, and focus on privatisation, asset monetisation and long-term funding for infrastructure investments, according to Morgan Stanley, are the three key themes from the 2021-22 Budget.

“We believe the overall approach of the fiscal policy is in line with the message from the Economic Survey, which made a case for active fiscal policy and the focus on growth for creating debt sustainability,” analysts at the foreign research and brokerage wrote in a post-budget note.

Among proposals, divestment of select public sector banks (PSBS) and one general insurance company, initial public offer (IPO) of Life Insurance Corporation (LIC), an institution to infuse liquidity into the corporate bond market, the higher limit for FDI in insurance, measures for the financial sector, and no new taxes for investment in the capital markets are some of the other measures hailed by analysts Morgan Stanley.

Kotak Securities has raised the Nifty50 December 2021 target to 15,000 from 13,500 and that of the Sensex to 51,000 from 46,000. Rusmik Oza, executive vice-president (head fundamental research-pcg), Kotak Securities, said: “Our revised Cy21-end Nifty50 EPS estimate works to ~770. Assigning a slightly higher multiple of 19.5x gives us a target of 15,000 for the Nifty50 for the end of CY21.” UBS said: “Our December 2021 target for the Nifty is 14,500, with a positive bias.” The target, however, was unchanged.