Sensex at 94,000 by 2026-end? HSBC upgrades India to ‘Overweight’; top reasons for positive view

HSBC projects that Sensex will hit 94,000 by the end of 2026, and has upgraded the status of Indian equities to ‘Overweight’ from ‘Neutral’. HSBC says the change in stance is due to improved market valuations, favourable government initiatives, and steady domestic investor participation.The firm projects a Sensex target of 94,000, suggesting a potential increase exceeding 13% from present values.This represents a change in HSBC’s Asia-focused equity approach, positioning India as a comparatively appealing market within the Asian region’s fluctuating environment, according to an ET report.According to the recent “Asia Equity Insights Quarterly” report, HSBC emphasises that despite foreign investors reducing their Indian equity holdings over the previous year, domestic investors have maintained their strong presence, offering market stability.The firm observes that India has remained relatively stable compared to other Asian markets, particularly Korea and Taiwan, which have experienced significant volatility. This stability is attributed to supportive policies and robust macroeconomic fundamentals.HSBC highlights India’s attractiveness due to its balanced earnings valuations, limited foreign investment exposure, and a government committed to reforms and capital expenditure-driven growth.These elements provide a robust foundation for equity performance in the mid to long-term perspective. Despite potential moderation in earnings expectations, HSBC remains optimistic, citing sustained investor confidence and ongoing policy momentum.In the broader context, Asia-Pacific equity markets have risen approximately 20% year-to-date, primarily supported by local retail investors, despite significant foreign fund withdrawals. HSBC maintains an “Overweight” stance on Mainland China and Hong Kong, forecasting returns of +21.0% for FTSE China and +16.4% for FTSE Hong Kong through 2026.Meanwhile, HSBC has reduced Korea’s rating to ‘Underweight’, whilst ASEAN markets remain tepid amidst political uncertainty. Although Japan benefits from its depreciated currency, its market valuations appear extended.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)