Sensex forecast 2026: Sensex can soar to 89,000 by June 2026: Morgan Stanley – News Air Insight

Mumbai: Morgan Stanley said Indian equities are poised to scale new highs as it sees a case for re-rating. It expects the Sensex to reach 89,000 by June 2026 in its base case, implying an upside of 10% over Monday’s closing level of 81,018. The index gained 418.8 points, or 0.5%, on Monday.

Morgan Stanley said high growth with low volatility and falling interest rates are pushing Indian stocks’ Price to Earnings (PE) Ratio higher.

“This also supports the shift in household balance sheets towards equity and appears in the equity market in the form of a sustained bid on stocks,” said the brokerage in a client note. “The low beta itself emanates from improved macro stability and the structural shifts in household balance sheet towards equities.”

The recent stock price moves do not reflect the derating of equities compared with long-term bonds and gold, it said.

Morgan Stanley said a final trade deal with the US, more capex announcements, acceleration in loans, and improving trade with China could act as catalysts for the markets.

“While foreign portfolio investors’ portfolio positioning is at its weakest since the data started in 2000, our view remains that India’s low beta implies outperformance in a global bear market but underperformance in a bull market,” it said.