After Goldman Sachs, it’s now the turn of Morgan Stanley to turn bullish on Indian equities in 2021.

Morgan Stanley has upgraded its target for the Sensex to 50,000 by December 2021 from an earlier target of 37,300 for June 2021, as it feels that the coming growth cycle has not been fully priced in and hence there is more upside to the index. It has an overweight rating on India.

“We remain in a bull market that started in March, and even though one should expect corrections along the way, the equity market may have more legs before it tops out. We raise EPS estimates and index target,” said Morgan Stanley in a note.

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Goldman Sachs sets Nifty 50’s 2021 year-end target at 14,100

In a bull case scenario where the virus situation improves, recovery in growth is sustained, and global stimulus supports asset prices, Morgan Stanley has set a target of 59,000 for the Sensex. In a bear case scenario, it sees the Sensex at 37,000 if the virus issue lingers well into 2021.

Recently, Goldman had raised Indian equities to overweight and upgraded the Nifty target to 14,100 by 2021-end. Similarly, Nomura also had increased its 2021 year-end target of the Nifty 50 to 13,640. Morgan Stanley expects domestic cyclicals to outperform exports with rate-sensitives and consumers outperforming, and energy underperforming.