USNMix Report: 'In majority
of BJP in Lok Sabha Election 2019,
then stock market could go up to 47000. Sensex'.
then stock market could go up to 47000. Sensex'.
The dates of the Lok Sabha
elections have been announced. Polling will start from April 11. On May 23 the
results will be in front of everyone. It will be time to decide which will be
the next government in the country. But, in terms of market share, Modi government
is the only favored one. Global Brokerage firm Morgan Stanley has said in its
report that the market wants to be a strong government at the center. The
impact of having a strong government at the Center will also affect the Indian
stock market. Indeed, the uncertainty of the elections, the situation of
tension with Pakistan and the possibility of a trade war between India and
America, the market needs a strong foundation.
Boom by announcement of
election dates
According to News repor t, after the announcement of the dates of Lok Sabha
elections, the stock market has registered a strong rally on Monday. While
there was a surge of more than 300 points in the Sensex, the Nifty crossed the
11,000 mark. On Tuesday also the market has made a great start. The Sensex has
climbed nearly 500 points. Right now, the Nifty is trading around 11300.
Sensex to reach 47000?
According to Morgan
Stanley's report, the Sensex could reach 42,000 level by the end of 2019. At
the same time, if there is good speed, then the Sensex is estimated to reach
47000. At the same time, if the market weaknesses, the Sensex could slip to
33,000. However, weakness in the market is possible only when no party receives
the majority. If the absolute majority becomes the government then the market
will get faster.
Fall in oil prices
Morgan Stanley has said in
its report that due to uncertainty over rising oil prices and general elections
due in May of this year, the market has seen a decline in the last few
sessions. The report says that this year India's poor performance may be due to
rising oil prices and political uncertainty. However, the Global Brokerage
believes that the foundation of the Indian stock market is very strong and
there is a possibility of strongness in the coming days.
Morgan Stanley had three
types of estimates-
Base Case-
Until December 2019, the
Sensex can go up to 42,000. Its probability is 50 percent. Year-by-year basis
earning growth is estimated to be 21 percent in 2019 and 24 percent in 2020.
Bull case-
If the bull run was
introduced in the market, then the market could reach level of 47,000 by the
end of the year. Its probability is 30 percent. However, this would be a strong
election result and a party getting a majority. Estimated year-on-year basis
earning growth of 29 per cent in 2019 and 26 per cent in 2020.
Beer case-
At the same time, in case of
beer run the market can go up to 33,000. Its probability is 20 percent.
However, it will be possible only if global conditions are bad and election
results will not be okay. Earning growth is estimated to be 16 per cent in 2019
and 22 per cent in 2020 year-on-year basis.
These sectors are included
in the portfolio
According to the domestic
brokerage firm, it is advisable to include IT and healthcare, automotive,
capital goods and financial services in its portfolio, looking forward to the
situation. Given the recent turmoil in financial markets, it is easy to be
pessimistic. The macro approach for India has definitely been somewhat worse
than six months ago. But, Outlook remains strong and gives us reasons to be
optimistic.
Comments
Post a Comment