Morgan Stanley sees Sensex hitting 1 lakh mark by next July in bull case scenario

New Indian Express

a day ago

MUMBAI: Despite the continuing bloodbath in the market amid tariff woes, Wall Street major Morgan Stanley has pegged the benchmark Sensex at the 1-lakh-mark by July 2026 in a bull case scenario, which has a 30% probability, citing several triggers for the potential rally.
But in a bear case scenario, with a probability of 20%, the Sensex may plunge to 70,000 by July 2026, while in a base case scenario, the index may scale to 89,000, with a 50% probability.
The Sensex is massively down from the all-time peak of 85,978.25 it gained in the last week of September 2024 and after bleeding for five days, it closed with 0.52% at 81,019 on Monday.
Morgan Stanley's analysts Ridham Desai and Nayant Parekh said on Monday that there is a strong case for rerating of the domestic stock markets. "Get ready for new highs in the months ahead," they said noting that the country is likely to gain more share in global output in the coming decades, driven by strong foundational factors. These include strong population growth, a functioning democracy, macro stability-influenced policy boosts, better infrastructure, rising entrepreneurial class, and improving social outcomes.
Immediate triggers for a rally are a favourable trade deal with the US, more capex announcements, bank credit growth, uniform improvement in high frequency data and improving trade with China.
Explaining how they came to the possibility of the Sensex hitting the key milestone of 1,00,000 by next July, they said in the 'base case' scenario, which has 50% probability, it will hit an all-time high of 89,000 by July.
"This level assumes continuation in the country's gains in macro stability via fiscal consolidation, increased private investments, and a positive gap between real growth and real rates. Robust domestic growth, slow growth in the US but no recession, and benign oil prices are also part of our assumptions. In our base case, we also assume a benign trade deal with the US," they added.