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The report said, "A global market sell-off remains a key risk to absolute performance in Indian equities though we think Indian equities will likely outperform."
There is 40 per cent probability of a bull run in which case the BSE Sensex could hit the 19,000 mark by the end of 2009, the report said adding there is only 10 per cent probability of a bear phase in which case the Sensex could tank to 8,600 levels.
Predictions have been made in the report taking into consideration the Sensex levels in scenarios like bull and bear market and what it calls a base case. It said, "The market performance depends largely on the government action. In the context of the quality of the new government's mandate, the optimism shown by the market may not be misplaced".
In the case of bull dominance, the report has assumed factors like recovery in global growth, strong policy action from the government, lower non-performing assets among others.
The Managing Director of Morgan Stanley Equity Research Ridham Desai said it was difficult to predict whether the current uptrend in the market is a beginning of a new bull market.
Desai said that the world is awash with liquidity and India is getting its share of it through FIIs. Even if that is the case, we would come to know about it only with the benefit of hindsight, he said.
Also defensive sectors like healthcare may take a breather, he said. The Economic Times
June 4, 2009
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