Sensex Could Reach 1,07,000 by End-2026 in Bull-Case Scenario, Says Morgan Stanley

India’s benchmark index, the Sensex, could surge to 1,07,000 by December 2026—around 26% higher than present levels—according to Morgan Stanley’s latest projection released on Tuesday. The investment bank assigned a 30% probability to this bullish outcome.

In its base-case scenario, which carries a 50% probability, Morgan Stanley expects the Sensex to climb to 95,000 by the end of 2026. The update follows a period in which Indian equities delivered softer returns compared to the broader emerging markets since 1994.

The brokerage previously predicted the Sensex would hit 1,00,000 by June 2026, also with a 30% probability. Analysts now say valuations have corrected significantly and may have bottomed out in October 2025, setting the stage for positive growth surprises that could drive a market re-rating.

For the index to reach the 95,000 mark under the base case, the report highlights several key drivers: sustained macroeconomic stability supported by fiscal consolidation, stronger private investment, and a positive spread between real growth and real interest rates.

Ridham Desai, Managing Director and Chief India Equity Strategist at Morgan Stanley, said the base case assumes a resolution to tariff issues between India and the US in the coming weeks, a 25-basis-point cut in short-term interest rates, and a supportive liquidity backdrop.

However, the bank also issued a cautionary bear-case scenario. If crude oil prices surge past $100 per barrel, the RBI tightens fiscal conditions, and the US economy slips into recession, the Sensex could fall to 76,000 by December 2026—a scenario given a 20% probability.

With inputs from IANS