When will Sensex cross 1 lakh mark? Morgan Stanleys forecast
Morgan Stanley has predicted SEnsex to hit a target of 107,000 by DEcember 2026, implying a potential upside of approximately 26% from current levels.
New Delhi: Global brokerage firm Morgan Stanley has released its outlook on the Indian stock market. The firm said that the Indian equity market may show strong growth in the next two years. Especially in 2026, its bull case for the market seems to be quite strong. Let's take a look at its targets, prospects and top investment themes.
Sensex prediction: What Morgan Stanley said
According to Morgan Stanley, the Sensex could climb about 13 percent to 95,000 by December 2026. For this, the firm has stated a 50 percent probability. This target is based on a trailing P/E multiple of 23.5, which is slightly higher than the average of 22 in the last 25 years. The brokerage believes that 2026 will be a macro-driven year rather than stock-picking.
In his bull case, the global brokerage has set a target of 1,07,000 for the Sensex, which means there is room for growth of about 26 percent from the current levels. The firm says that India's long-term growth story is getting stronger. The impact of government policies, economic recovery and policy changes are the main basis. The probability of this bull case being true is said to be 30 percent.
Bear Case: Sensex @76,000
In the event of a downside, the brokerage has reported a level of 76,000 for the Sensex. Morgan Stanley says that most of the risks are not domestic, but related to the global level, which can affect the movement of the market.
Morgan Stanley is 300 basis points overweight on this theme. The firm says that urban demand is improving, which will support the consumption sector overall. Also, the GST deduction is also positive for this sector.
On this theme too, the brokerage is overweight by 300 basis points. The rise in strong government capex and private capex is giving a boost to the sector. The government's infrastructure-driven growth policy will support this more strongly.
According to the brokerage, credit growth is increasing and credit costs are low, although there may be some pressure in the NIMs of banks. Nevertheless, deregulation is positive for this sector. So Morgan Stanley is overweight on this theme by up to 200 basis points.
The brokerage is equal weight on Communication Services, Consumer Staples and Technology. At the same time, Utilities (100 bps), Energy (200 bps), Healthcare (200 bps) and Materials (300 bps) have been given an underweight perspective.
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