Global brokerage HSBC expects India’s equity benchmark BSE Sensex to rise about 10% by end-2026, setting a target of 94,000 for the 30-stock index, saying that domestic stocks offer value compared to China.
Indian markets have lagged their Asian and emerging market peers this year, weighed down by softer corporate earnings, rich valuations and heavy foreign selling.
Foreign portfolio investors have sold $16.8 billion worth of Indian equities in 2025 so far, putting the market on track for a record year of outflows. However, selling has eased since October as earnings improved.
Both Nifty and Sensex are up about 10% so far this year. On Thursday, the benchmarks were around 0.6% below their record highs touched in September 2024.
With earnings showing signs of recovery and valuations cooling after a 14-month lull, India “once again looks attractive,” analysts led by Herald van der Linde of HSBC Global Investment Research said in a note on Thursday.
“Earnings are set to recover, banks’ margin will expand in the coming quarters and consumer names, including autos, are set to benefit from goods and services tax (GST) reductions and lower interest rates,” the brokerage said.
HSBC said India is well-positioned to draw renewed emerging market inflows as investors seek alternate growth stories across Asia beyond artificial intelligence. Fiscal and monetary levers should support a growth pickup in early 2026, the analysts added.
Along with India, the brokerage remains overweight on mainland China, Hong Kong and Indonesia, while staying underweight on Taiwan, South Korea, Japan, Singapore and Thailand.
HSBC upgraded Indian equities to “overweight” from “neutral” in September, becoming one of the earliest major brokerages to turn bullish on Asia’s third-largest economy.
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