Global brokerage firm Morgan Stanley forecasts a robust rally in Indian markets, projecting the Sensex to hit 95,000 by December 2026. The firm’s India Equity Strategy Playbook report highlights the current favorable conditions such as low valuations, improving earnings, and positive investor sentiment typical of market recoveries. With an expected 22% upside potential from the recent close, the report suggests limited downside risks, making it an attractive entry point for long-term investors.
India’s market performance has been weak over the past year, but the report emphasizes strong underlying fundamentals driven by domestic demand, policy stability, and a rebound in capital spending. The bullish outlook is supported by a revival in the earnings cycle, with indicators pointing to growth in consumption, investment, and services despite subdued market expectations.
Morgan Stanley notes that India’s share of global corporate profits now surpasses its index weight by a significant margin, indicating positive earnings revisions ahead. The firm anticipates that foreign investor positioning, coupled with improving earnings momentum, could lead to further upside surprises. While geopolitical risks and global economic uncertainties persist, the report underscores a positive trajectory for a sustained market recovery.
