HSBC Upgrades Indian Stock Market To 'Overweight', Expects Sensex To Rise To 94,000 by 2026-End

Global investment bank HSBC has upgraded Indian equities to “overweight” from “neutral”, saying that the index looks attractive on a regional basis after recent underperformance. The bank now expects the Sensex to reach 94,000 by the end of 2026, implying roughly a 15% upside from current levels, while maintaining its 2025-end target at 85,130.

The upgrade comes eight months after HSBC had downgraded Indian equities in January, when concerns over slowing growth and high valuations had limited upside potential.

HSBC noted that US tariffs are unlikely to significantly affect the profits of most Indian 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 Although foreign funds have withdrawn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,” HSBC said in its Asia Equity Strategy note.

So far in 2025, Indian equity benchmarks have risen about 5%, lagging the MSCI Asia ex Japan index, which has climbed roughly 23% over the same period. HSBC highlighted that ongoing policy support and light foreign fund positioning provide a favourable backdrop for further gains.

At 12:46 pm on September 24, the Sensex was trading 301.05 points lower at 81,796, while the Nifty was down 80 points at 25,088.90. The Nifty 50 extended its weakness for a fourth straight session, as steep fall in the rupee against the dollar and persistent FII outflows weighed on sentiment, pulling the index further away from recent highs. The Indian rupee touched a fresh low near ₹88.70 per dollar on Tuesday, with charts pointing toward ₹89.20–₹89.50 if weakness persists, though some support is seen around ₹88.30–₹88.50. The persistent currency pressure is adding to investor anxiety.

Major sectors led by IT, FMCG, Private Bank, Auto, Oil & Gas traded in the red in the morning session.

(With inputs from Reuters)