In the last 2-3 months, many brokerage firms have made predictions about where the Sensex can reach in 2026. Someone has said that a level of 89,000 will come, while someone has given a level of 95,000. Global brokerage firm Morgan Stanley has now said that the Indian stock market may gain momentum again in 2026. In its bull case (best estimate), the company has set the target of Sensex at 1,07,000 by December 2026. That means an increase of about 27 percent from the current level. This is possible when macro economic conditions and government policies remain favorable for the market.
Let us tell you that these estimates are based on market conditions, economic development, policy changes and global events. Most firms are positive, but also mention market-related risks such as oil prices or US trade tensions.
Morgan Stanley itself gave a base case target of 89,000 in August 2025 by June 2026. Then while updating on November 5, 2025, it estimated 100,000 in the bull case and 85,000 in the base, which was based on earnings growth and improvements. Similarly, HSBC set a target of 94,000 by the end of the year in September-November 2025, which reflected 13 percent growth with an overweight rating. Goldman Sachs had predicted Sensex to reach around 96,000 on November 9, 2025, equivalent to Nifty’s 29,000.
According to Morgan Stanley’s latest, this will happen if-
- Crude oil prices should remain below $65 per barrel.
- Tariffs (import duties) start reducing across the world.
- Government policies should promote development while keeping inflation under control.
- Indian economy should maintain its fast pace.
If this happens, then between FY25 to FY28, the earnings of the companies included in the Sensex may grow at the rate of about 19 percent annually, which will provide strong support to the share prices.
In its base case (normal situation), Morgan Stanley estimates that the Sensex can reach 95,000 by the end of 2026. That means there could be an increase of about 13 percent. This estimate is based on –
- Indian economy should remain stable.
- Government should maintain financial discipline.
- Private sector investment should be good.
- Global growth remained stable.
- Domestic liquidity (cash availability) should improve, which also includes reduction in interest rates.
In this situation, companies’ earnings can grow by about 17 percent annually by FY28. In the bear case (bad situation) the Sensex can fall to 76,000.
This will happen when-
- Oil prices should go above $100.
- Interest rates should be made more stringent.
- There should be less demand abroad and the environment should be weak.
Morgan Stanley analysts Ridham Desai and Nayant Parekh say that India’s policy changes and expectations of better growth are likely to revive the stock market.
According to Ridham Desai, “After the worst performance in the last 30 years, we see Indian equities regaining strength in 2026. A change in policies will accelerate nominal growth, which will end the slow earnings momentum of the last 12 months. Foreign investors’ stake is currently at a historically low, so the performance looks better going forward.”
It has been said in the report that in the coming times-
- There may be a cut in interest rates.
- Liquidity may increase in the market.
- Steps like relief in GST can become the reason for the next rise in the stock market.
India’s external sector is also getting stronger-
- Dependence on oil is decreasing.
- And export of services is going well.
All this makes India a stable and attractive market. Besides, strong policy environment, better infrastructure and increasing participation of domestic investors also make the country different from other emerging countries.
The brokerage believes that domestic cyclical sectors (like banking, consumer spending, industrials) will perform better in the Indian market. He is overweight on Financials, Consumer Discretionary and Industrials, while underweight on Energy, Materials, Utilities and Healthcare. The conclusion of the report is that going forward the market will be driven by macro factors i.e. larger economic conditions, and the strategy of selecting only selected stocks will not be as important.
