September 17, 2012 / 9:38 AM / 5 years ago

MARKET EYE-Indian stocks to hit record high in 2013-MStanley

* Morgan Stanley sets a new target for the BSE index at
23,069 points by the end of December 2013, implying an index
trading at 14.9 times estimated 2014 earnings.
* The target would surpass the BSE's record high of 21,206.77
points hit on Jan. 10, 2008.
* "Conditions for a new bull market are getting slowly
satisfied. The yield curve has stopped flattening, liquidity is
improving, valuations appear supportive and profit margin
expansion is a growing possibility in the coming months," the
investment bank says in a note dated on Monday.
* Morgan Stanley expects domestic earnings growth of 10 percent
in fiscal 2013 and of 19 percent in fiscal 2014. 
* Morgan Stanley says cyclicals are "ultra cheap," and prefers
"quality" cyclicals over defensives.
* As a result, the investment bank goes "underweight" consumer
staples in its model portfolio, while raising energy and
materials to "overweight" and taking industrials to "neutral."
* Morgan Staley also cuts technology exposure in its portfolio
by 100 bps.

 (abhishek.vishnoi@thomsonreuters.com)

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