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Modi 2.0 could propel Sensex to 60,000 in 5 years, says BSE CEO Ashish Chauhan

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After the Sensex created history to hit 40,000 following Narendra Modi-led BJP’s thumping victory in Lok Sabha elections, BSE CEO Ashish Chauhan noted that the 30-share index has given stellar returns in the last 40 years. “The Sensex has grown from just 100 to above 40,000 in a matter of 40 years, representing a return of 400 times, ” Ashish Chauhan told in an interview to ET Now. Last week on Thursday, the Sensex spurted more than 1,000 points to hit an all-time high of 40,124.96. However, later, the Sensex shed more than 1,313 points from the day’s high on Thursday, registering its biggest intra-day fall in over 11 years, to end in the red.

Noting the Sensex’s stellar rise in the last 4 decades, Ashish Chauhan said that if the dividend yield is also considered since the inception, the Sensex ‘s value stands at 60,000 today. “Investors could have made 570-600 times returns since 1979 if they had remained invested,” observed Chauhan. Trading does not get returns, but investment in an asset called India will reap returns, said Chauhan. So, where does he see the Sensex at the end of Modi 2.0?

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“If you see the last 5 years, very tough decisions have been taken with respect to the GST, the bankruptcy code, on auctioning natural resources etc. This will allow the government to now invest in infrastructure and create more demand, jobs, entrepreneurship to propel growth. If we grow at slightly more than 7.5-8%, then the index will grow at about 10%. If you multiply on a simple basis, we have 50%. So, 60,000-odd is easily possible, as we have already reached 40,000,” he told the channel.

After the Sensex and Nifty scaled new peaks of above 40,000 and 12,000 respectively last week, global firm Morgan Stanley has raised its target to 42,500 on the Sensex by June-2020, and 13,500 on Nifty in the same time-frame. This likely continuity in administration is source of comfort for stocks due to an accompanying policy predictability. We expect some shifts in the policy regime,” Morgan Stanley noted in the report.