INSUBCONTINENT EXCLUSIVE:
Mumbai: Morgan Stanley’s Ridham Desai has predicted Sensex at 42,000 by December end as his base case scenario to which he attaches 50 per
cent probability, implying a 14.4 per cent return from the current levels.
“The market could start pricing in a stronger election outcome
in the coming weeks causing Nifty to break its four-month range to the upside
The broad market will likely outperform Nifty,” Ridham Desai and Sheela Rathi, equity strategists at Morgan Stanley said in a note.
Desai
and Rathi have been among the most optimistic analysts when it comes to market predictions
Their bull case, which has a probability of 30 per cent, pegs Sensex at 47,000 by 2019 end, while the bear case expects the index to end the
year at 33,000, which could be a result of a poor election outcome such as a hung Parliament.
“We think India’s underperformance this
year has been a result of rising oil prices and political uncertainty
Both these issues may have hit their peak in terms of negativity,” they said.
“The events of the past eight weeks on the political front
including various pre-poll alliance formations, the farmer cash transfer scheme and the military action across the border may cause
polarization in the forthcoming general elections and increases the probability of a stronger government,” Desai and Rathi said.
They
expect Nifty to break its 10,500-11,000 range to the upside, which it has respected since November.
