Morgan Stanley has lifted its target for the BSE Sensex to 50,000 by December next year from the earlier 37,300 for June 2021, saying that the upcoming growth cycle is not fully priced in, and there is more upside to the index. The target for Sensex implies that the index will trade at a forward price-to-earnings multiple of 16 times. In a bull-case scenario where the covid situation improves, recovery in growth is sustained and global stimulus supports asset prices, Morgan Stanley has set a target of 59,000 for the Sensex. Overall, Morgan Stanley expects small and mid-cap stocks to beat the narrow indices or large caps in 2021 as it feels that concentration of market cap and profits may have peaked with the return of the growth cycle. We expect domestic cyclicals to outperform exports, with rate-sensitives and consumers outperforming whereas energy should underperform," said Morgan Stanley.

Source: Mint November 17, 2020 02:03 UTC