Sending optimistic signals about the rising Indian economy, global brokerage firm Morgan Stanley feels that the 30-share BSE Sensex may hit 80,000 within the next year.
The share market benchmark indices continued to rise for the fifth straight day. Morgan Stanley has predicted that the bull run is here to stay in 2023. According to Ridham Desai, India equity strategist of Morgan Stanley, in the base case scenario, Sensex will hit 68,500 by December 2023.
However, Morgan Stanley’s optimism comes with a caveat. For such a spectacular forecast, It assumes that domestic growth will continue its strong path, the after-effects of the Ukraine-Russia conflict will not spill over into 2023, and the US will not slip into a protracted recession. It will also remain to be seen if government policy remains supportive, and the RBI executes a calibrated exit, for attaining the desired results.
The reasons behind the continued outstanding performance are government policy, including a structural rise in the domestic equity saving pool and a boost to corporate profit share in GDP.
Focus on FDI flows raised the share of FDI in the Balance of payment and allowed India to run a monetary policy that is less sensitive to the US Fed. It also reduced the equity market’s sensitivity to US growth conditions and oil prices. The sharp correction in commodity prices and earnings growth compounded at the rate of 25 percent annually has also contributed to markets hitting record highs.
It is also presumed that the domestic bid on shares will continue and also foreign portfolio investors will continue buying.
On Monday, rallying for the fifth day in a row, BSE Sensex climbed 211.16 points or 0.34 percent to settle at 62,504.80, its fresh record closing high. The broader NSE Nifty gained 50 points or 0.27 percent to end at 18,562.75, its record closing high.