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Morgan Stanley’s Bull, Base, and Bear case scenario

According to the report, a set of 16 leading indicators and six coincident or lagging indicators suggest an improving market outlook for the second half of 2021. The bull-case takes Sensex higher to 61,000. For this objective to emerge, Morgan Stanley appraises that the infection ebbs totally, recuperation in development is maintained, and worldwide improvement upholds asset prices. It also includes that the government will need to deliver strong policy including infrastructure creation, ease of doing business and fiscal consolidation. Morgan Stanley’s base case situation sees the index at 55,000 by December this year. This assumes stability in the current virus situation and a recovery in the economy per our forecasts. We expect Sensex earnings to rise 32% in F2022. For Sensex to arrive at these levels, no new financial improvement is required to be launched; however, help from the government on administrative and legislative reforms is expected.

If the infection waits all the way into the second 50% of this current year and growth wavers which are additionally managed with no strategy reaction, prompting misfortunes in the monetary framework then the bear case target for Sensex is at 41,000. However, Morgan Stanley analysts only see a 20% possibility of this scenario taking place.

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