NEW DELHI: At a time when the Sensex is down by approximately 12,000 points from its record highs and the Indian equity market is facing intense selling pressure, analysts at Morgan Stanley (MS), a global leader in financial and investment services, remain highly optimistic. They predict that the 30-share BSE benchmark will surge to 105,000 by December 2025 in their bull-case scenario, reflecting a potential rise of about 41% from current levels.
This bullish outlook comes despite a challenging global environment. In December 2024, Morgan Stanley had made a similar forecast. However, since then, global equity markets have experienced heightened volatility due to the US President Donald Trump’s tariff policies. Additionally, India’s equity market has witnessed a significant withdrawal of foreign institutional investors (FIIs), driven by concerns over expensive valuations and sluggish corporate earnings growth.
Morgan Stanley analysts argue that the risk-reward balance for Indian markets is becoming increasingly favorable. Their base-case scenario projects the Sensex to reach 93,000 by December 2025, while a bear-case scenario could see the index decline by nearly 6% to 70,000 over the same period.
As of Tuesday’s close, the Sensex stood at 74,102 while the NSE Nifty50 settled at 22,497.90. Both indices have fallen approximately 14% from their peaks in late September 2024 and have seen a 5-6% decline so far in 2025.
While Morgan Stanley remains bullish, other brokerages offer more conservative forecasts. Bank of America (BofA) Securities has set a December 2025 Nifty50 target of 25,000, citing attractive valuations following recent corrections. Nomura has pegged its Nifty target at 23,784, while Axis Securities revised its base-case target to 24,600, factoring in risks from uncertain trade policies, rupee depreciation and relatively high valuations.
Morgan Stanley analysts believe Indian markets are currently oversold and are entering a stock pickers’ market. They emphasize that a recovery will depend heavily on global factors, including US policy decisions and global growth rates.
The firm highlights India’s potential to become the world’s most sought-after consumer market, driven by a major energy transition, rising credit-to-GDP ratios, and an expanding manufacturing sector.
“The market has ignored the RBI’s policy pivot and a strong budget from the government, among other positive developments since early February. India’s low beta characteristic makes it an ideal market for the uncertain macro environment that equities are dealing with. Importantly, our sentiment indicator is in strong buy territory,” MS wrote.