On September 24, HSBC, a global investment bank, upgraded its forecast on Indian equities to "overweight" from "neutral" due to their recent underperformance and local favorability.
HSBC now expects the Sensex to reach 94,000 as of the end of 2026, reflecting a 15% gain from the current level, while keeping its 2025-end target price at 85,130.
This upgrade follows about eight months since HSBC had downgraded Indian equities in January, citing slowing growth with high valuations that capped upside potential.
The bank also said US tariffs would have little bearing on profits for the majority of listed companies.
"As a contrast to Taiwan and Korea's crowded trades, India is Asia's quiet little corner. While foreign funds have pulled out large sums from India over the past 12 months, when the market has underperformed markedly, domestic investors have been strong. While expectations for earnings growth can decline a bit further, valuations no longer pose a concern, government policy is starting to be a positive influence on equities, and most foreign funds remain light. We believe Indian equities now appear regionally attractive and upgrade the market to overweight (from neutral). As in China, tariffs in the US will have minimal impact on profits at most listed companies," HSBC wrote in its Asia Equity Strategy note.
In 2025 till now, India's equity indices have risen 5%, falling behind the MSCI Asia ex Japan, which has risen about 23% during the same duration.
HSBC also pointed out that government policy is increasingly favoring equities in India, and that foreign fund participation is still pretty low.
Up to 10:30 am on September 24, the Sensex had declined 230.62 points, or 0.28%, to 81,871.48, and the Nifty dropped by 67 points, or 0.27%, to 25,102.50.
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