New Delhi: Indian equities look poised to recover from a steep relative correction as key drivers of underperformance begin to reverse due to front loading of capex and GST rate cuts, a report said on Tuesday.

US-based investment banking firm Morgan Stanley projected a 50 per cent probability that the BSE Sensex will reach a target of 89,000, indicating an upside potential of 6 per cent by June 2026.

A positive growth surprise is likely in the months ahead as India’s growth cycle is set to accelerate, backed by the reflation effort of the RBI and the government via rate cuts and cash reserve ratio (CRR) cut, the report said.

Policy measures cited as catalysts include Reserve Bank of bank deregulation and liquidity infusion, front loading of capex and a near Rs 1.5 trillion in GST rate c

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