According to Morgan Stanley, the Sensex could reach 105,000 by December 2025. The Indian market is expected to remain b, with a bullish outlook on the financial, tech, and industrial sectors despite global uncertainties.
Morgan Stanley on Market Outlook: Global markets are experiencing a downturn. Geopolitical tensions and US trade policies are impacting the global market. However, Morgan Stanley anticipates continued strength in the Indian stock market. The firm believes that in a bull-case scenario, the Sensex could reach 105,000 by December 2025, representing a 41% increase from current levels.
Potential Sensex Fluctuation
Morgan Stanley has presented three potential scenarios for the Indian market:
Bull-case: The Sensex could reach 105,000 by the end of 2025.
Base-case: The Sensex could reach 93,000, a 25% increase from current levels.
Bear-case: In a market downturn, the Sensex could fall to 70,000, 6% below current levels.
Good Opportunity for Investors in the Stock Market?
Ridham Desai, Head of India Research at Morgan Stanley, and her team stated in their report that the Indian equity market is currently oversold. This presents an opportunity for investors to select better stocks. According to the report, global economic policies, changes in US Federal Reserve rates, and global growth rates will play a crucial role in the strength of the Indian market.
Which Sectors and Stocks is Morgan Stanley Bullish On?
Morgan Stanley has given an overweight rating to several sectors and companies.
Overweight Sectors:
Financial
Consumer Discretionary
Industrial
Technology
Overweight Stocks:
Jubilant FoodWorks
Mahindra & Mahindra (M&M)
Maruti Suzuki India
Trent
Bajaj Finance
ICICI Bank
Titan Company
L&T (Larsen & Toubro)
UltraTech Cement
Infosys
Impact of RBI Policies on the Indian Market
According to Morgan Stanley, the Indian stock market has largely ignored the policies of the Reserve Bank of India (RBI). The report suggests that India is on its way to becoming the world's most preferred consumer market. Furthermore, growth in the energy transition and manufacturing sectors will support economic growth.
Strengthening Economy Through Increased Consumption and Capex
Morgan Stanley believes that India's consumption and capital expenditure (capex) will improve in the coming years. Potential income tax cuts will boost urban demand, supporting consumption in rural areas as well.
Focus on Inflation and Global Risks
- Headline inflation is projected to be 4.9% in FY25 and 4.3% in FY26-27.
- Investors should monitor US trade and tariff policies, dollar strength, and Federal Reserve policies.
