What Morgan Stanley Expects from Indian ETFs after Modi Win



Indexes and ETFs

While Indian indexes and India-focused ETFs dropped on the day of vote counting, the next day, on May 24, the indexes as well as the ETFs recovered substantially. The S&P BSE Sensex rose 1.61% on May 24 and closed at 39,435. The NIFTY 50 gained 1.6% and ended the day at 11,844.10.

The WisdomTree India Earnings ETF (EPI), the iShares India 50 ETF (INDY), and the iShares MSCI India ETF (INDA) gained 1.69%, 1.47%, and 1.46%, respectively, on May 24. These ETFs invest in companies forming the NIFTY 50 and BSE Sensex.

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What are analysts saying?

Morgan Stanley (MS) expects both the key Indian indexes to rise over the next year. The investment bank has given a target of 45,000 for the S&P BSE Sensex for June 2020, an upside of 14% on May 24’s closing. Morgan Stanley’s (MS) expectation for the NIFTY 50 is 13,500, which also translates to 14% upside over May 24’s closing price. Morgan Stanley feels that the risks for equity markets are more global in nature as the trade war continues.

Trump to meet Modi in Japan

Trump congratulated Modi on the big win. He also asserted that “great things are in store for the US-India partnership” in his congratulatory tweet. The White House also confirmed a Trump-Modi meeting on the sidelines of the G20 gathering in Japan next month.

Other world leaders including Russia’s Putin, Canada’s Trudeau, and Israel’s Netanyahu also congratulated Modi on his massive victory.


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