Morgan Stanley ups Sensex target to 55,000; bullish on cyclicals, midcaps

We believe the overall approach of the fiscal policy is in line with the message from the Economic Survey, said Morgan Stanley in a post Budget note

Buoyed by Budget proposals presented by Finance Minister Nirmala Sitharaman on February 1, the S&P BSE Sensex surged over 3,300 points in two sessions to reclaim the 50,000 mark. If analysts at Morgan Stanley are to be believed, the index is on course to hit 55,000 mark by December 2021 – an upside of around 10 per cent from the current levels.

Very gradual fiscal consolidation glide path with looser-than-expected fiscal policy; good quality spending mix and reasonable assumption on fiscal math; and focus on privatisation, asset monetisation and long-term funding for infrastructure investments, according to Morgan Stanley, are the