New Delhi, Nov. 18 -- The Indian stock market is expected to regain its mojo in 2026 after delivering its worst relative performance to emerging markets (EM) in 31 years, according to analysts at Morgan Stanley. In its latest India strategy report, the global brokerage firm has set a bull-case Sensex target of 107,000 by December 2026, and a base-case target of 95,000.

Morgan Stanley Equity Strategists Ridham Desai and Nayant Parekh argue that the policy pivots and a reflation push are laying the groundwork for a strong recovery in nominal growth and corporate earnings after a mid-cycle slowdown over the past year. They noted that the relative valuations have corrected meaningfully and likely bottomed in October, while foreign portfolio ...