Sensex to 105,000 by December 2025? Morgan Stanley's Bold Call on Why Indian Stocks Will Crush Emerging Market Rivals

Sensex to 105,000 by December 2025? Morgan Stanley’s Bold Call on Why Indian Stocks Will Crush Emerging Market Rivals

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Rally Reloaded: Sensex’s EM Comeback Fueled by Fundamentals Over Flash

MUMBAI – Forget the August FII exodus (Rs 80,000 Cr outflow); India’s equities are plotting a phoenix rise. Morgan Stanley’s October 13 note projects Sensex at 105,000 by December 2025 – a 28% climb from 82,000 – as “comparative earnings growth turns up, even on conservative estimates.” Ridham Desai’s team flags a sentiment gauge in “robust buy” territory, akin to 2023’s pre-rally lows. With Nifty flat at 25,000 amid tariff jitters, this call cuts through noise, spotlighting India’s edge over China (down 15% YTD) and Brazil (stagnant).

X lit up: #Sensex105K trended with 80K posts, investors sharing “top 10 buys” memes. Reactions? Bullish buzz – a viral ET thread on “India vs EM” garnered 20K engagements, with users touting 170 Mn demat accounts (up from 40 Mn in 2020). Data validates: Market cap-to-GDP at 130% (Dec 2024), highest in decade, per NSE.

Comparisons sting for rivals: China’s SSE Composite lags on property bust; India’s Nifty boasts 15% EPS growth FY26E vs EM avg 8%. “Positive shift not priced in,” Desai writes, eyeing Q2 earnings kickoff.

Top 10 Reasons: From GDP Firepower to FII Rebound

  1. GDP at 7.2%: IMF upgrades for 2025, vs global 3%; capex cycle adds 1.5% impulse.
  2. Inflation Tamed: 1.54% Sept print gives RBI cut ammo – 50 bps eyed by March.
  3. RBI Easing: Repo at 5.5%, LAF tweaks boost liquidity; bank credit to 15% by FY26.
  4. FII Confidence: July-Aug dip over; $10 Bn inflows Q4 on tariff thaw.
  5. Earnings Rebound: Nifty EPS +12% FY26; IT, banks lead with 18% ROE.
  6. Consumption Surge: 9.1% GST haul signals wallet opening; rural demand +10%.
  7. Reforms Momentum: GST two-slab, PLI 2.0 for steel – 5% GDP kicker.
  8. Women Power: 30% Zerodha users female; demat surge adds depth.
  9. Valuations Fair: PE at 22x vs EM 15x historical premium; dividend yields 1.5%.
  10. Sentiment Bottom: Gauge at Sept 2024 lows – historical 20% rebounds follow.

Real spaces: Dalal Street’s October 13 open flat, but Delhivery (+5%) and PN Gadgil IPOs pop on Muhurat hype. X poll (15K votes): 65% bet on 100K+ Sensex.

Sector Spotlights: Banks, IT, and Auto Lead the Charge

Financials (35% Nifty weight) shine: SBI’s NIM at 3.4%, NPAs 2.3%; HSBC upgrades to “buy.” IT rebounds on US deals – TCS +3% post-Q2 whispers. Auto: Maruti’s 6% PV sales jump in Sept, EV push via PLI.

Comparisons: Versus Nasdaq (PE 28x), Nifty’s 22x tempts value hunters. Post-2020, India gained 15% vs EM index; 2025 rematch looms. “Hiring in Tier-2/3 up 21%,” per Naukri, fueling midcaps (Nifty Midcap +18% YTD).

Reactions raw: Broker notes flood – Motilal Oswal picks Delhivery (target Rs 600). X bear: “Valuations frothy,” countered by bull charts showing RSI 55 (neutral).

Risks and Roadmaps: Global Storms, But India’s Anchor Holds

Downsides: US recession (Fed dot plot: 50 bps 2025 cuts) or oil spike to $90. Yet, stress tests: System CRAR 17%, absorbs 2% GDP shock. For investors: SIPs at Rs 20,000 Cr monthly; multi-asset funds +7% YTD.

As Diwali Muhurat nears (Oct 20, one-hour trade), optimism peaks. “India’s long-term strong,” Desai affirms. 105,000? Bet on it – EM laggards watch enviously.

Key Takeaways

  • Bold Target: Sensex 105,000 by Dec 2025 (+28%), driven by 7.2% GDP and 12% EPS growth.
  • EM Edge: Outperforms China/Brazil on reforms, consumption; FII $10 Bn inflow Q4.
  • Investor Action: SIP in banks/IT; midcaps for alpha amid fair 22x PE.

Also Read Best Dividend Stocks 2025

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