Even as benchmark indices scaled fresher highs on Monday, rallying for the fifth straight day, global brokerage firm Morgan Stanley is confident that the bull run is here to stay in 2023. According to the firm, the 30-share BSE Sensex may hit 80,000 in the next one year.
India equity strategist of Morgan Stanley, Ridham Desai, said in the base case scenario, Sensex will hit 68,500 by December 2023.
According to Morgan Stanley, Sensex hitting the target of 80,000 is contingent on domestic growth continuing its strong path as per its forecasts, the aftereffects of Ukraine-Russia conflict not spilling over into 2023, and the US not slipping into a protracted recession. It is also dependent on government policy remaining supportive, and the RBI executing a calibrated exit.
"At the helm of India’s outperformance has been government policy, including a structural rise in the domestic equity saving pool, a boost to corporate profit share in GDP, and a focus on FDI flows, which raised the share of FDI in BoP, allowing India to run monetary policy that is less sensitive to the US Fed, and reduce the equity market’s sensitivity to US growth conditions and oil prices," Economic Times quoted Desai as saying.
Other factors that may lead to markets hitting record highs include a sharp correction in commodity prices, and earnings growth compounding at the rate of 25 per cent annually.
The firm expects the domestic bid on shares to continue and also the foreign portfolio investors to continue buying.
On Monday, rallying for the fifth day in a row, BSE Sensex climbed 211.16 points or 0.34 per cent to settle at 62,504.80, its fresh record closing high. The broader NSE Nifty gained 50 points or 0.27 per cent to end at 18,562.75, its record closing high.