Sensex Could Touch 39,000 by Dec: MS
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.