More positives than negatives for stock markets

Index is upgraded with optimistic 'bull case' by Morgan Stanley computed at 39k by end-December 2017

The Sensex is trading at a current price to earnings ratio or P/E (last four quarters, weighted by free float) of 22.7 and a forward one-year P/E of 18.2. The forward P/E is estimated of course. At an index value of 31,110, we can calculate backwards to derive a current EPS of Rs 1,371 and a forward EPS of Rs 1,710. This implies that the Sensex is expected to see EPS growth of about 24.5 per cent in this financial year.

Is this historically likely? The 30-share index has an annual growth of 6.7 per cent since 2010 and an