Sensex at 1,07,000 by 2026-end in bull case: Why Morgan Stanley looks bullish on equities
The brokerage also expects 30% probability of Sensex scaling past the 1 lakh mark to 107,000 by December 10 this year.
- Feb 9, 2026,
- Updated Feb 9, 2026 4:41 PM IST
Amid the ongoing market recovery, Morgan Stanley has suggested that Indian stock market is set for a re-rating. The brokerage attributed easing of India's hawkish macro environment post-Covid 19 as a key factor behind its re-rating stance. According to Morgan Stanley's equity strategists Ridham Desai and Nayant Parekh, reflation efforts by RBI and government through rate cuts, bank deregulation and liquidity infusion, sustaining capital expenditure, tax cuts and relatively stimulating budget will help accelerate India's growth cycle. This could lead to a sharp turn in earnings growth over the coming months.
"The trade deals and thawing of relations with China add to the mix," the report said.
The analysts said that Indian stocks have a rare combination of inexpensive relative valuations, poor trailing performance, strong policy stimulus and a consequent growth upcycle, an undervalued currency, weak foreign positioning and potentially a new buyback cycle.
The global brokerage expects the Sensex to reach 95,000 by December. It expects a 50% probability of this possibility.
The brokerage also expects 30% probability of Sensex scaling past the 1 lakh mark to 107,000 by December 10 this year.
If oil remains consistently below $60/bbl in sync with other growth catalysts like “robust domestic growth and steady global growth,” it said.
However, the global brokerage did not rule out the risk of a downside either, given the continuing headwinds. It expects a 20% probability of Sensex slipping to 76,000 if oil prices surge past $90/barrel and the RBI ends up tightening to protect macro stability.
Meanwhile, in the current session Indian equity benchmarks extended gains for the second consecutive session on Monday, led by positive investor sentiment around trade developments and foreign fund inflows. Sensex surged 485.35 points or 0.58 per cent to end at 84,065.75, while the NSE Nifty50 climbed 173.60 points or 0.68 per cent to 25,867.30.
Amid the ongoing market recovery, Morgan Stanley has suggested that Indian stock market is set for a re-rating. The brokerage attributed easing of India's hawkish macro environment post-Covid 19 as a key factor behind its re-rating stance. According to Morgan Stanley's equity strategists Ridham Desai and Nayant Parekh, reflation efforts by RBI and government through rate cuts, bank deregulation and liquidity infusion, sustaining capital expenditure, tax cuts and relatively stimulating budget will help accelerate India's growth cycle. This could lead to a sharp turn in earnings growth over the coming months.
"The trade deals and thawing of relations with China add to the mix," the report said.
The analysts said that Indian stocks have a rare combination of inexpensive relative valuations, poor trailing performance, strong policy stimulus and a consequent growth upcycle, an undervalued currency, weak foreign positioning and potentially a new buyback cycle.
The global brokerage expects the Sensex to reach 95,000 by December. It expects a 50% probability of this possibility.
The brokerage also expects 30% probability of Sensex scaling past the 1 lakh mark to 107,000 by December 10 this year.
If oil remains consistently below $60/bbl in sync with other growth catalysts like “robust domestic growth and steady global growth,” it said.
However, the global brokerage did not rule out the risk of a downside either, given the continuing headwinds. It expects a 20% probability of Sensex slipping to 76,000 if oil prices surge past $90/barrel and the RBI ends up tightening to protect macro stability.
Meanwhile, in the current session Indian equity benchmarks extended gains for the second consecutive session on Monday, led by positive investor sentiment around trade developments and foreign fund inflows. Sensex surged 485.35 points or 0.58 per cent to end at 84,065.75, while the NSE Nifty50 climbed 173.60 points or 0.68 per cent to 25,867.30.