New Delhi: As global markets grapple with tariff wars and economic uncertainty, a bold voice from Wall Street is singing India’s praises. Morgan Stanley, the global investment giant, has doubled down on its bullish outlook, predicting that the BSE Sensex could surge to an unprecedented 1,00,000 by June 2026.
This audacious forecast, carrying a 30% probability, challenges the gloom of foreign investors and dismisses US President Donald Trump’s tariff threats, painting a vibrant picture of India’s economic ascent.
A Defiant Forecast Amid Global Pessimism
Morgan Stanley’s latest report, released on Monday, stands in stark contrast to the caution gripping global markets. With foreign portfolio investors slashing their exposure to Indian equities to the lowest levels since 2000, the firm’s optimism signals a dramatic clash of perspectives. “The equity market is underestimating India’s growth cycle,” said Ridham Desai, Morgan Stanley’s chief equity strategist for India. “The peak of earnings and market performance is yet to come, and the world will witness it.”
The firm’s base case projects the Sensex at 89,000 by June 2026, implying a 12% upside from current levels. This scenario, assigned a 50% probability, assumes robust domestic growth, stable oil prices, and a favourable India-US trade deal. The Sensex would trade at a trailing price-to-earnings (P/E) multiple of 23.5x, surpassing the 25-year average of 21x — a premium reflecting India’s promising mid-term growth trajectory.
The Bull Case: A Leap To 1,00,000
In its bullish scenario, Morgan Stanley envisions the Sensex soaring to 1,00,000, driven by a confluence of favourable factors. Key among them: crude oil prices staying below $65 per barrel, easing inflationary pressures, and robust GST reforms paving the way for growth upgrades. A resolution of global trade tensions, particularly a reversal of tariff policies, could further propel earnings growth to a compound annual growth rate (CAGR) of 19% through FY2025-28. This optimistic outlook underscores India’s resilience against external headwinds, including Trump’s proposed 50% tariffs on Indian goods.
Desai challenges the naysayers who believe India’s best days are behind it. “The structural shifts in India’s economy are profound,” he said, pointing to a rising population, a thriving democracy, and policies fostering macroeconomic stability. These fundamentals, coupled with improved infrastructure and a burgeoning entrepreneurial class, position India to capture a larger share of global output in the coming decades.
A Transformative Economic Landscape
Morgan Stanley’s vision extends beyond stock market milestones. India is poised to become the world’s most sought-after consumer market, with manufacturing’s share in GDP set to rise. The declining reliance on oil, coupled with growing service exports and fiscal consolidation, signals a structural reduction in savings imbalances. This, Desai notes, will lead to lower real interest rates and reduced inflation volatility, creating a stable environment for sustained growth.
The report highlights a shift in household savings towards equities, driven by low market volatility and falling interest rates. This trend supports higher P/E ratios, bolstering the case for India’s market outperformance. “Supply-side reforms and policy changes are aligning to keep inflation in check and growth steady,” Desai added, forecasting a future where India’s economic narrative defies global scepticism.
A Message To The World
Morgan Stanley’s unwavering confidence in India sends a clear signal: the nation’s growth story is far from over. As Trump’s tariffs loom, India’s economic resilience and market potential stand tall, backed by structural strengths and a forward-looking policy framework. The Sensex’s journey to 1,00,000, if realised, could redefine India’s place in the global financial order, proving that even amid stormy seas, India’s economic ship sails strong.