HSBC upgrades Indian equities to 'overweight', pegs Sensex to rise 15% to 94,000 by 2026-end

HSBC upgrades Indian equities to 'overweight', pegs Sensex to rise 15% to 94,000 by 2026-end

Global investment bank HSBC on September 24 upgraded Indian equities to "overweight" from "neutral", and said the shares are looking attractive on a regional basis after recent underperformance.

HSBC said it expects Sensex to hit 94,000 by end of 2026, a 15% upside from current levels and has kept 2025-end target at 85,130.

The upgrade comes eight months after it had downgraded Indian equities in January citing slowdown in growth amidst high valuations, which limited the upside potential.

HSBC said US tariffs will have little impact on the profits of most listed companies.

"In stark contrast to the crowded trades in Korea and Taiwan, India is Asia's quiet corner. Although foreign funds have withdrawn significant amounts from India in the last 12 months, a period in which the market has seriously underperformed, local investors have remained resilient. While earnings growth expectations can fall a little further, valuations are no longer a concern, government policy is becoming a positive factor for equities, and most foreign funds are lightly positioned. We think Indian equities now look attractive on a regional basis and upgrade the market to overweight (from neutral). As in China, US tariffs will have little impact on the profits of most listed companies," said HSBC in its Asia Equity Strategy note.

So far in 2025, India's equity benchmarks rose 5%, underperforming MSCI Asia ex Japan, which has risen about 23% during the same period.

HSBC added that government policy is becoming a positive factor for equities in India, where most foreign funds are lightly positioned.

At 10:30 am on September 24, the Sensex was down 230.62 points or 0.28% at 81,871.48, and the Nifty was down 67 points or 0.27% at 25,102.50.

With inputs from Reuters