Morgan Stanley says Sensex hit 1 lakh-mark by June 2026 in bull case

By Anjali Sharma

WASHINGTON – Morgan Stanleyon Monday issued a positive note for Indian equity markets, stated that the benchmark index Sensex can hit the key 1 lakh-mark by June 2026 in a bull case.

It cited several potential triggers for the rally.

Stanley said that a final trade deal with the US, more capex announcements, acceleration in loans, uniform improvement in high frequency data, and improving trade with China were cited as the likely triggers for the possible massive growth.

Morgan Stanley analysts Ridham Desai and Nayant Parekh released a note titled ‘India Equity Strategy Playbook’. It said that there is a strong case for the rerating of Indian stock markets.

“Get ready for new highs in the months ahead,” it said. Adding that India is likely to gain share in global output in the coming decades, driven by strong foundational factors. These include strong population growth, a functioning democracy, macro stability-influenced policy, better infrastructure, a rising entrepreneurial class, and improving social outcomes,” the note said.

In its Bull case scenario, Morgan Stanley expects Sensex to cross the key Rs 1 lakh mark for the first time ever by July 2026.

This holds 30 per cent probability, according to the firm. It noted that the target may be achieved if oil prices are persistent below the USD 65-mark, which in turn would create a better environment for trade, and prompt more rate cuts by the RBI.

”The global trade war is curtailed by complete reversals in positions on tariffs, leading to improved growth prospects. Government reforms surprised to the upside with a slew of GST rate cuts and some progress on farm laws,” it added.

It concluded that Sensex earnings compound at 15 per cent annually over F2025-28 with perceptibly lower growth in F2026 and equity multiples de-rate to reflect poor macro conditions.