Sen­sex Could Touch 39,000 by Dec: MS

The Economic Times - - Companies: Pursuit Of Profit -

Mum­bai: The Sen­sex could touch the 39,000-mark by De­cem­ber in its ‘bull case sce­nario’ says Mor­gan Stan­ley. The bro­ker­age is over­weight on con­sumer dis­cre­tionary, fi­nan­cials andtech­nol­ogy,while be­ing un­der­weight on con­sumer sta­ples, en­ergy, ma­te­ri­als and tele­com.

“Strong cor­po­rate pay­out (buy­backs and div­i­dends), a new M&A cy­cle, and ro­bust house­hold de­mand­fore­quiti­escom­bined­with im­prov­ing growth and rea­son­ablee­quity­val­u­a­tions(vs.EMand bonds) bring our bull case into play,” said Mor­gan Stan­ley in a client note. In its so-called bull cas­esce­nario,the­bro­ker­age­sees a 30% prob­a­bil­ity of the Sen­sex touch­ing its tar­get. The bro­ker­age has a base case tar­get at 30,000 and a bear case of 24,000 for the Sen­sex by De­cem­ber. Mor­gan Stan­ley at­taches 50% prob­a­bil­ity to the Sen­sex meet­ing its base case tar­get and 20% prob­a­bilit y t o i t s bear case tar­get.

It­prefer­sNBFCs over banks, and pri­vate sec­tor re­tail banks over cor­po­rate/gov­ern­ment-owned banks cit­ing the flush of liq­uid­ity in banks. “Com­mer­cial­bankliq­uid­i­ty­isat a10-yearhigh­which­couldleadto stron­gloan­growthinthe­com­ing months,” the re­port said.

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