India is likely to be the world’s fastest-growing large economy in the next ten years and hit $6 trillion which would propel its equity markets to a fresh record high, says a report.
According to global brokerage Morgan Stanley, the concomitant impact of higher GDP growth is that corporate earnings growth is also likely to accelerate which should propel equity markets.
Morgan Stanley expects the benchmark Sensex to cross the 1 lakh-mark by 2028, making it one of the the top five equity markets in the world with a market capitalisation of $6.1 trillion. “We think India’s stock market could be among the world’s best performers in the next ten years, leading to India’s market cap rising from $2 trillion to $6 trillion.”
“We see the BSE Sensex crossing the 100,000 mark, albeit the bulk of the returns are likely to be front ended in the coming five years,” said Morgan Stanley in a note on Wednesday. The firm also expects India to become the world’s third largest economy in the world with a GDP of $6 trillion, helped by digitisation. The firm said that digitisation will provide a boost of 50 to 75 basis points to GDP growth.