BNP sets Sensex target for 2018 at 37,500

French broking outfit BNP Paribas has set a target of 37,500 for the Sensex in 2018. The target implies 13 per cent upside for the benchmark index from the current levels. BNP joins other foreign brokerages, including Goldman Sachs and Nomura, to forecast a double-digit rise in Indian equities for 2018.

BNP is bullish on the prospects for Asian equities as global economic growth forecasts remain strong. “Economic growth forecasts for 2018 are stronger than those for 2017 for most DM (developed markets) and EM (emerging markets) economies, barring a few exceptions; key Asian currencies are likely to remain stable in 2018; return on equity (ROE) recovery, a key driver of Asian re-rating over the past year, seems likely to continue,” said Manishi Raychaudhuri, head of equity research-Asia Pacific, BNP Paribas, in a note titled ‘Nearing the peak, but not quite there’. Even after the recent rally, valuations across Asian equities are largely in line with long-term averages and not egregiously expensive, he said.