MUMBAI: While reiterating a bullish view on Dalal Street, the Wall Street major Morgan Stanley has lowered its Sensex target for December to a low 82,000, which is 12 lower than its previous forecast but still is 9% higher than current levels of the index.
In December 2024, Morgan Stanley had projected the Sensex at 93,000 by December 2025 as its base case, representing a 14% upside.
The brokerage perceives the domestic markets as a relative safer haven at a time when tariff-related uncertainty is causing volatility in global share prices.
"India's low beta is helping to significantly outperform amid the global selloff, even while the index could reach multi-month lows. Key India-specific catalyst includes continuing dovish actions from the Reserve Bank, stimulus through GST rate cuts, a trade deal with the US, and incoming growth data. Our new December Sensex target is 12% lower, at 82,000, but 9% above the current level," said Morgan Stanley India managing director Ridham Desai said in a note Tuesday.
In the note, Desai cites factors that have helped the country outperform in a period of global selloff, though the risk of testing 'multi-month low' remains.
In December 2024, the brokerage had projected the Sensex at 93,000 by December 2025 as its base case, representing a 14% upside and in a bullish scenario the Sensex was to test 1,05,000, while a bearish outlook placed it at 70,000.
Once the ongoing correction ends, Morgan Stanley expects the domestic markets to likely resume outperformance to emerging markets peers in the coming months. India has strong macro stability with improving terms of trade, declining primary deficit, and falling inflation volatility, the brokerage had said in a February note.
The domestic markets is being perceived as a relative safer haven at a time when tariff-related uncertainty is causing volatility in global share prices. Domestic demand, which is emerging from a brief lull, is expected to support businesses and help withstand a potential global recession better than Asian peers who are saddled with higher tariffs, Desai concluded.