Mumbai, April 9: Global brokerage firm Morgan Stanley announced on Thursday that the Indian stock market is poised for a significant rally, with the Sensex potentially reaching 95,000 by the end of December 2026.
In its latest report, the American brokerage highlighted that low valuations, improving earnings, and cautious investor positioning suggest that the market’s downturn may be coming to an end.
Morgan Stanley stated that in a base case scenario, the Sensex could hit the 95,000 mark by December 2026, representing an increase of approximately 22 percent from Wednesday’s closing.
The report indicated that negative risks appear limited compared to the potential upside, making the current situation an attractive investment opportunity for long-term investors.
The brokerage noted that the performance of India’s market over the past year has been near historical lows, with a sharp decline in valuations.
However, strong domestic demand, policy stability, and improvements in capital expenditure have kept the foundation of the country’s economy robust.
A key reason for this positive outlook is the improvement in the earnings cycle. The brokerage reported that high-frequency indicators point to strong trends in consumption, investment, and services, even though market expectations remain subdued.
Analysts also noted that India’s share of global corporate profits has surpassed its index weight by the largest margin to date.
Morgan Stanley anticipates positive revisions in earnings moving forward.
In terms of valuation, the brokerage mentioned that the Sensex is currently trading at its lowest level compared to gold, a long-term indicator often associated with major market turning points.
Additionally, India’s price-to-book ratio is near historical lows, despite improvements in macroeconomic stability and limited policy uncertainty.
Despite ongoing geopolitical tensions and risks associated with global growth, Morgan Stanley believes that the broader outlook points towards sustained market recovery.
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