Morgan Stanley sees Sensex at 93,000 by December 2025 in base case

Morgan Stanley has reaffirmed its optimistic outlook on India, predicting that it will be one of the top-performing emerging markets in 2025. The firm projects a 14 percent increase in the BSE Sensex, estimating it will reach 93,000 by December 2025 in its base case. In a bullish scenario, the Sensex could climb to 1,05,000, while a bearish outlook suggests a potential drop to 70,000.

The brokerage is particularly positive about sectors such as financials, consumer discretionary, industrials, and technology, while it is underweighting other sectors. According to Morgan Stanley's latest strategy report, India's strong earnings, macroeconomic stability, and robust domestic capital inflows make it a compelling investment destination.

Despite a 6 percent correction from their all-time highs due to significant foreign institutional investor (FII) selloffs in October, Indian benchmarks—the Sensex and Nifty—remain attractive. Morgan Stanley believes that "India is still the market to beat," bolstered by consistent government policy actions that strengthen the long-term narrative.

In the previous trading session, the Nifty 50 increased by 241 points, or 1 percent, to 24,708, while the Sensex rose by 810 points, or 1 percent, to close at 81,766.

Looking ahead to 2025, the brokerage anticipates it will be a stock picker's market, contrasting the macro-driven trends seen since the COVID-19 pandemic. Morgan Stanley favors cyclical stocks over defensive ones and prefers small and mid-caps (SMIDs) over large-caps.

Additionally, investors are closely watching the Reserve Bank of India's (RBI) monetary policy decision expected today. There is anticipation of policy easing, with potential reductions in the cash reserve ratio (CRR) from 4.5 percent to 4 percent, which could enhance liquidity and support economic growth.

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