Morgan Stanley: Indian stock market may regain momentum next year.

Morgan Stanley expects that the Indian stock market will perform strongly in the next 12 months, amidst strong domestic growth, stable global growth, and moderate oil prices. Ridham Desai and Nayant Parekh's report states that the performance of the Indian stock market relative to emerging markets will be the worst since 1994. "Relative valuations have significantly corrected and may have already bottomed out in October," they said. The recovery in the Indian growth cycle is benefiting from domestic interest rate cuts, regulatory easing in the banking sector, liquidity injection, pre-arrangements for capital expenditure, and a reduction in goods and services tax. Morgan Stanley predicts that in a base scenario, the BSE Sensex index has a 13% upside potential by the end of December 2026.