The bank said India, unlike crowded trades in Korea and Taiwan, stands out as Asia’s “quiet corner” where stocks now look attractive on a regional basis.
“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,” said the bank’s analysts led by Herald van der Linde, head of Asia Pacific Equity Strategy.
HSBC set a price target on the Sensex for 2026 at 94,000, implying an upside of 15% over Wednesday’s closing level of 81,715.63. For 2025, the index target is 85,130.
The bank said there are no signs of growth recovery yet.
“While growth can help boost consumption in the near term, for a more sustainable pick-up, wages and private capex will have to improve,” said HSBC’s analysts.The bank said the growth recovery is likely to be gradual, but the risks are reflected in share valuations. HSBC said concerns over the fallout of the 50% US tariff on Indian imports also hang over corporate earnings though the direct impact could be muted.
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