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Will Sensex do a Nifty? Experts say 54,500-55,000 likely by December

Those who missed the rally can look at buying even at the current level or on dips, as the Sensex is expected to touch 54,000-55,000 by December 2021, say experts.

May 28, 2021 / 02:35 PM IST

The Nifty has done it, can the Sensex do it too? The Nifty hit a record high of 15,455 on May 28, overhauling its previous best performance of 15,431 on February 16. The Sensex, however, is still more than 1,000 points away from its peak. It was at 51,477 at the time of writing of this copy, still some distance from the high of 52,516 recorded on February 16 in intraday trade.

Experts said the Sensex can hit record highs in the June series, which has started on a bullish note. If someone missed the rally, they can look at buying even at the current level or on dips, as the index can touch 54,000-55,000 by December 2021, they said.

In a recent report, Morgan Stanley said India is a stock- pickers market, with ample alpha opportunity. Morgan Stanley’s leading indicators relating to fundamentals, both macro and corporate earnings, are generally positive about equity returns.

The global investment bank is looking for acceleration in the largecap index return in the coming months. The base case target for the Sensex remains unchanged at 55,000, which implies an upside potential of 7 percent by December 2021.

The base case target for which Morgan Stanley places a 50 percent probability assumes stability in the current virus situation and a recovery in the economy according to its forecast.

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Also read: Nifty hits record high; but these risks still loom on the market

In a bull case scenario, for which the global investment bank places a 30 percent probability, the Sensex can move up to 61,000, assuming the virus ebbs completely, recovery in growth is sustained and global stimulus supports asset prices.

The Sensex might not be at a record high but the market capitalisation of BSE-listed companies has touched a record $3 trillion.

Fall in COVID cases, pick up in the vaccination programme, stable global cues and strong March quarter results have all resulted in a vertical rise in benchmark indices and the rally is likely to continue.

The next trillion could well come in next three years, experts said.“As long as earnings catch up over the next few months and the global backdrop remains strong, the market should make new highs,” Hemang Jani, Head Equity Strategist, Broking & Distribution, Motilal Oswal Financial Services said in an interview.

“MCap is just a number and I would be surprised if this doesn’t happen within the next 12 months. There is a strong revival in the economy and corporate sector along with global tailwinds, which should get reflected in the stronger market cap,” he said.

Bhushan Mahajan, Managing Director, Arthbodh Shares and Investments Private Ltd, sees the Nifty touching 16,000 and the Sensex 54,500 in next few months.

“The market cap may also reach around 3.4 trillion by end of the year, adding the bulls are here to stay,” he said.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

 
Kshitij Anand is the Editor Markets at Moneycontrol.

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