Unexpected token < in shallow in react typescript

I am using react + typescript + jest done the intial setup's but when i try to the run the test i am getting the following error:

 const component = enzyme_1.shallow(<Dummy_1.default />).contains(<h1>Hello</h1>);
                                           ^

    SyntaxError: Unexpected token <

Package.json

"jest": {
    "setupFiles": [
      "<rootDir>/tests/setup/test-shim.js",
      "<rootDir>/tests/setup/test-setup.js"
    ],
    "moduleFileExtensions": [
      "ts",
      "tsx",
      "js"
    ],
    "transform": {
      "^.+\\.(ts|tsx)$": "ts-jest"
    },
    "testMatch": [
      "**/tests/*.(ts|tsx|js)"
    ]
  },

Test file:

import React from 'react';
import { shallow } from 'enzyme';

import Dummy from '../src/Dummy';

it('renders dummy page', () => {
  const component = shallow(<Dummy />).contains(<h1>Hello</h1>);
  expect(component).toBeTruthy();
});

I have tried adding preset in jest but i got the same error only. I have not installed babelrc do i need to install it? I have created the app using create-react-app