Global brokerage firm Morgan Stanley has announced a big forecast for the Indian stock market. The Indian stock market may reach new highs in the next few years, a brokerage firm has said in its new report. The firm further added that the BSE Sensex could touch the 1,07,000 level by December 2026.
According to Morgan Stanley, the Indian stock market is now going to strengthen rapidly. Post-Covid inflation and tight policies are easing and the market is getting a chance to 're-rate' i.e. get new value.
Ridham Desai and Nayant Parekh, equity strategists at Morgan Stanley, said, RBI and the government together are taking measures like rate cut, easing bank regulations, increasing liquidity in the market, reducing taxes and increasing capital expenditure, which will increase the pace of the economy. Besides, improved relations with China and new trade agreements are also supporting the market.
1. Growth signal: Morgan Stanley believes that earnings of Indian companies are expected to increase. This means, there is a strong possibility of improvement in the profits of the companies.
2. RBI Policy: Analysts say, RBI's policies will support liquidity (money flow) and loan growth in the banking system. Notably, the RBI recently kept the repo rate unchanged on February 6, after a total cut of 1.25% since February last year.
3. Policy Reform: According to Morgan Stanley, other initiatives including privatization are being implemented, which will boost economic growth.
4. Foreign Buying: After several months of sell-off by foreign investors (FPIs), conditions are now at low levels but foreign investment needs to pick up again to boost growth.
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