Morgan Stanley Predicts 18% Surge in BSE Sensex by 2025

Morgan Stanley forecasts an 18% rise in BSE Sensex by December 2025, driven by robust macroeconomic stability, fiscal consolidation, and private investments. The report highlights no US recession, stable oil prices, and favorable policy measures as key factors for this optimistic outlook on India's equity market.

According to a recent report by Morgan Stanley, the BSE Sensex is expected to climb by 18% by the end of 2025, thanks to a favorable economic landscape in India. The report underlines a positive outlook for the country's equity market, buoyed by strong macroeconomic stability, ongoing fiscal consolidation, and a rise in private investments.

Morgan Stanley's projections emphasize continued progress in maintaining India's macroeconomic stability by ensuring a positive gap between real economic growth and real interest rates. This stability is considered essential for fostering robust domestic growth, supporting the base-case scenario where no recession occurs in the United States, crude oil prices remain benign, and the global economic environment stays stable.

The report also highlights expectations for a slight reduction in interest rates and positive liquidity conditions as part of its monetary policy assumptions. Additionally, it suggests that retail participation will significantly exceed bond supply, adding confidence in robust domestic growth. The Sensex earnings are anticipated to grow at an annual rate of 17.3% through FY2027, exceeding consensus projections by 15% and showcasing optimism about India's economic resilience and corporate performance.

(With inputs from agencies.)