Kolkata: Sensex is likely to reach the 89,000 level by June 2027 — signaling a potential upside of 15% from current levels — global brokerage Morgan Stanley
has said. According to the broking house, it is the base-case scenario. Morgan Stanley has mentioned that geopolitical tensions pose a new challenge in a new strategy note. According to the brokerage the there could be a resurgence in earnings growth following a six-quarter slowdown and domestic cyclical sectors, banks and consumption-related companies can feature among them. Interestingly, Morgan Stanley had said a month ago, that Sensexcould move to 95,000 is a base case scenario by December 2026.
Which sectors are preferred
The Morgan Stanley report has clearly said that sectors linked to private capital expenditure, rising consumption, and accommodative monetary conditions could become the preferred choices over the next 12 to 18 months. It has maintained ‘Overweight’ rating on financials, industrials and consumer discretionary stocks. It expressed caution for sectors such as energy, healthcare and materials.
Which are the preferred stocks
The brokerage has based its positive outlook on the next phase of the capital expenditure cycle, especially in the sectors of energy infrastructure and data centers. The companies that could turn out to be preferred ones are:
- Adani Power
- Larsen & Toubro
- ICICI Bank
- Bajaj Finance
- Maruti Suzuki India
Sensex projections
The probabilities of the different scenarios are the following:
Base case
Sensex will reach 89,000
Probability: 50%
Bull case
Sensex will reach 100,000
Bear case
Sensex will reach 66,000
Morgan Stanley sniffs earnings growth
Significantly, Morgan Stanley has forecast that India’s GDP will grow at 7.6% in FY27, which will decelerate to 6.7% in FY28 and again accelerate to 7% in FY29. Morgan Stanley has mentioned that India’s macro environment has improved after easing of stringent measures adopted post-pandemic and a reduction in policy-related uncertainty. The trade agreements with the US and the EU could support growth. Improving relations with China is another positive. “After a mid-cycle slowdown that lasted for six quarters, the trend in earnings growth is now turning around and is likely to accelerate further,” the US-based brokerage said. However, geopolitical tensions have become a fresh headwind.
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