Morgan Stanley has cut its target of BSE Sensex for December by 12% to 82000 points, which implies a 7% rise from current levels. Additionally, the US-based investment banker cut its earnings estimates for Sensex by 13% in 2025-26 (Apr-Mar) amid concerns of impact on growth due to US tariffs. 

Apart from this, Morgan Stanley has also lowered India's FY26 GDP growth forecast by 40 basis points to 6.1%, and sees the economy expanding at a slower pace of 6.3% in the next financial year. Previously, the investment bank had expected India's GDP to grow 6.5% in both FY26 and FY27. 

Morgan Stanley reduced the GDP growth forecasts due to the current US policy on tariffs, the prospects of China's retaliation, and accompanying uncertainty. But, the investment banker believes there would be recovery in domestic growth on major pickup in government spending and the dovish stance of the Reserve Bank of India.