By Aditya Raghunath
Investing.com -- A report in The Economic Times says that brokerage firm Morgan Stanley (NYSE:MS) has predicted that the BSE Sensex can hit 61,000 by the end of 2021 thanks to the foundation laid by the Budget.
This would be the most bullish case where corporate earnings will have to grow by 37% and the US dollar would have to enter a sustained bear market.
The Sensex crossed the 50,000 mark today, touching 50,154 before falling back to 49,900 levels. The Morgan Stanley note said that market sentiment has been given a boost thanks to the lack any extra taxation, higher infrastructure spending (the government has laid out a Rs 1.08 lakh crore capital spend for roads and highways, the highest ever allocation in Budget history), and the decision to privatize two PSU banks and one insurance firm.
The government has also raised the cap for FDI (foreign direct investment) in insurance companies from 49% to 74 and has decided to go ahead with the IPO for Life Insurance Corporation with a probability that some part of the IPO will be reserved for LIC policyholders.
Apart from the bull case, Morgan Stanley has raised its estimation for the Sensex to hit 55,000 from the earlier target of 50,000.