Light Rain
22°CMon :Isolated Thunderstorms. High: 32 Low: 21

Indian shares likely to fall led by banks: Morgan Stanley

Indian shares likely to fall led by banks: Morgan Stanley

New Delhi: The Reserve Bank of India’s tightening moves have made Indian markets more vulnerable to global cues with share prices likely to fall, led by banking stocks, a Morgan Stanley report says.

According to the global brokerage firm, RBI’s dovish commentary last Monday amidst possibly the severest liquidity tightening that the central bank has initiated since 1998 has made the asset markets even more vulnerable to global cues especially on possible tapering of quantitative measures in the US.

“As RBI’s moves echo into the economy, we believe that share prices in India are likely to fall led by banks,” Morgan Stanley said.

The global brokerage firm had earlier projected that the Nifty would trade in the 5,600-6,300 range, but “last week’s policy guidance and dovish signals may take toll on the market led by financials”, it said.

“We now think the Nifty is likely to be in a lower trading range of 5,200-6,000. We cut our bear case target from 17,912 to 16,200,” Morgan Stanley said.

Morgan Stanley has revised the bear case on the Sensex down by another 10 percent from 17,912 to 16,200 and has lifted the probability of that happening from 20 percent to 35 percent.

Meanwhile, its bull case probability of 23,000 has fallen to 5 percent from 20 percent earlier.

The research further said “our probability-weighted index target for end-2013 is cut to 19,720,” and added that “the fall could be more severe but the index has heavyweights, which are insensitive to rates and beneficiaries of a rising USD.”

The 30-share barometer, Sensex, which had lost over 517 points in the previous two sessions is trading almost flat with gains of just 49 points at 18,732.16 in morning trade today.

India ranks poorly on valuation, earnings revision breadth, political risk and corporate governance score, Morgan Stanley said.

 

Top Stories

relaiancecapital1--621x414

Reliance Group to request new banking license permit with Nippon

September-01-2014
Mumbai: Reliance Capital Ltd, some piece of the Anil Ambani-controlled Reliance Group, said on Monday it will request another keeping money permit
1365433816-0319

United Bank of India announces Kingfisher Airlines wilful defaulter

September-01-2014
The United Bank of India on Monday announced the grounded Kingfisher Airlines and executive Vijay Mallya an alleged ‘wilful defaulter’, making it
264144-rajnath

Rajnath Singh has no arrangements to meet Pak partner at SAARC: Home Ministry

September-01-2014
The Home Ministry today rejected reports that Rajnath Singh has arrangements to meet his Pakistani partner on the sidelines of the SAARC
36280888.cms

Nifty Hikes to 8,000 for First Time on GDP Boost

September-01-2014
BSE Sensex and Nifty surged to record highs after monetary development in the first quarter hit a nine-quarter high. Information discharged on
modi.222jpg

Japan invites Modi, talks underway to sign safeguard, exchange settlements

September-01-2014
Tokyo: Prime Minister Narendra Modi was agreed an authority welcome by the legislature of Japan on Monday. Joined by Japan PM Shinzo
cbi-2

CBI strikes living arrangement of MLA’s and former cops regarding Saradha trick

August-29-2014
GUWAHATI: The CBI on Thursday did look operations in a few prominent areas in Guwahati regarding multi crore Saradha trick. Sources said