Brokerage firm Morgan Stanley says that if India joins the global bond indices, the Sensex can touch 80000 by December 2023.
$20 billion inflow in 12 months
India may have to wait till early next year for its bonds to enter the JP Morgan Emerging Market Global Index. As per reports, it has been delayed due to complex operational issues. The Wall Street brokerage said in a note that India’s inclusion in global bond indexes could result in inflows of about $20 billion over the next 12 months. Due to this, there will be a lot of boom in the stock market.
some issues need to be resolved
A Reuters report earlier said that there are some operational issues, including local bond settlement rules, tax complications, which still need to be resolved. Index investors favor international settlement platforms such as Euroclear, but India has said it wants to settle bonds onshore like China. The government and the Reserve Bank of India will sort out some of these issues by the end of this year. If these issues are resolved, India’s inclusion could be announced as early as next year.
50% chance of reaching 68,500 under these conditions
Morgan Stanley expressed a 50 percent expectation of the Sensex touching 68,500 by the end of 2023 under certain circumstances. The brokerage firm said that this could happen if the impact of the Russia-Ukraine war does not materialize in 2023, there is no recession in the US, policy support from the government continues and RBI does not raise interest rates.
Sensex can fall up to 52,000 under these circumstances
The brokerage firm has also given targets for bear market conditions. The firm said the Sensex could fall to 52,000 if commodity prices rallied, RBI hiked interest rates sharply and India’s growth due to a slowdown in the US and Europe. But the probability of this is only 20 per cent.
There may be brakes on the boom in the first half
The brokerage firm also said that due to expensive valuations and continuous rally, there may be a brake on the ongoing market rally in the first half of the year 2023. Which can benefit other emerging markets. On Monday, the first trading day of the week, after touching the level of 62,700, the BSE Sensex has closed at its lifetime high of 18,562 after touching a record high of 62,504 and Nifty 18,614.
