New Delhi, July 6 -- India's recent decline in market valuations is temporary rather than structural, and a recovery in economic growth could help reverse the trend and provide a boost to equities, according to a report by Morgan Stanley.

The report said that the combination of subdued recent market performance and lower foreign investor ownership could create a favourable environment for Indian equities going forward.

It stated, "India's relative de-rating is cyclical and with growth acceleration in the pipeline, it has potential to reverse"

Morgan Stanley argued that concerns suggesting India's valuation decline is structural are overstated.

According to the report, one argument for a structural de-rating is that India's long-term g...