Morgan Stanley sets benchmark Sensex target of 74,000 by December 2024

Morgan Stanley has set a target of 74,000 for the benchmark Sensex by December 2024. This implies an increase of 12 percent compared to the current level. “This level suggests that the BSE Sensex will trade at a price-to-earnings ratio of 24.7x, higher than the 25-year average of 20x. The premium above the historical average reflects greater confidence in the medium-term growth cycle in India,” the broker said in its note ‘2024 India Equity Strategy Outlook’. Morgan Stanley has a bull case target of 86,000, which is conditional on a drop in oil prices to $70 per barrel and deep interest rate cuts by the Reserve Bank of India (RBI). It also has a bear case target of 51,000, with risks including an election delivering an unclear mandate with a change in government, oil prices rising past $110/barrel, the RBI tightening to protect macro stability and a recession in the US causing global growth to decline. .

“With strong earnings, macro stability and domestic flows, it is difficult to argue against India’s investment case. That said, a calendar full of events with potential binary outcomes is creating volatility in the market after it has been less volatile than ever,” strategists Ridham Desai, Sheela Rathi and Nayant Parekh wrote in a note.