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Morgan Stanley has adopted a very bullish stance on the Indian stock market. The firm says that the Sensex can touch the level of 1 lakh by June 2026, if oil prices and the global environment remain favourable. In the report, RBI policies, government expenditure and withdrawal of foreign investment have been cited as the main reasons. The company believes that India’s economy is now moving strongly towards stable growth.
New Delhi. Global financial firm Morgan Stanley has adopted a very bullish stance on India’s equity market. The company says that the phase of decline in the market is now over and the Sensex can touch the level of 1 lakh by June 2026. Morgan Stanley has placed this bull case with 30 percent probability and has said that the reasons due to which India was lagging behind the emerging markets, now seem to be ending.
According to the report, India’s growth cycle is now going to move forward rapidly. The active policies of the government and possible relief policies of RBI can play an important role behind this. Morgan Stanley said that the Reserve Bank may soon take steps like cutting interest rates, relaxing banking rules and increasing liquidity as part of ‘reflation effort’. Along with this, increasing the government’s capital expenditure and possible reduction in GST (about Rs 1.5 lakh crore, especially on consumption goods) can provide a big boost to the economy.
Foreign and geopolitical factors also help
Morgan Stanley has also included external factors in its estimates. The report says that the softening of relations with China and the possible benefits of the India-US trade agreement will prove to be positive for the country. The firm believes that the tough macroeconomic environment that India faced after the pandemic is now changing. Declining oil dependence, increasing service exports and better fiscal management have made India’s economy more stable, which will reduce the need for high interest rates and improve market valuations.
89 thousand base case and 1 lakh bull case
In its base case, Morgan Stanley has set the target of Sensex at 89,000 by mid-2026, the probability of which is said to be 50 percent. At the same time, the estimate of bull case of Rs 1 lakh is dependent on oil prices remaining below $65 per barrel, reduction in global trade tensions and strong growth in corporate earnings.
Market momentum will increase due to FPI inflow
The report says that the position of foreign portfolio investors (FPIs) is currently at a historically low level. Due to this, huge capital inflow is expected in the coming months. Morgan Stanley has also changed its investment strategy and is now giving priority to domestic sectors like banking, consumer goods and industrials over export-heavy sectors. This is an indication that the firm is expressing confidence in India’s internal growth potential.
