MUMBAI: A Bright Outlook for Sensex

In the face of recent global economic uncertainties and a notable decline in Indian stock indices, Morgan Stanley remains optimistic about the Indian market. The global financial giant has reaffirmed its year-end target for the Sensex at 105,000 points by December 2025.

Ridham Desai, leading a team of strategists and economists at Morgan Stanley, labels India as 'A stock pickers’ market'. They highlight that India's relative earnings growth is on the rise, even when considering more conservative consensus forecasts.

India's Unique Position in Global Trade

Another report from Morgan Stanley sheds light on India's unique position in the global trade landscape. Despite a low share in global manufacturing exports, India boasts a significant share in services exports. This could be a critical advantage in a world grappling with trade wars.

Attractive Valuations and Positive Developments

The team also points out that Indian stock valuations are the most attractive since the Covid pandemic. They note that the market has overlooked several positive developments, including the RBI’s policy pivot and a strong government Budget since early February. According to them, the sentiment indicator is strongly in favor of buying.

Potential Risks

However, risks for India could emerge from external factors such as US trade and tariff policies and the strength of the dollar. Analysts at Morgan Stanley admit that, like many investors, they were surprised by the recent slowdown in India's economic activity.