Despite recent global pressures, HSBC remains optimistic about the Indian stock market, projecting the Sensex could hit 94,000 by the end of 2026, a gain of over 13% from current levels.

Global Pressures

• US President Donald Trump has imposed tariffs on India totaling 50% and increased H1B visa fees to $100,000, which impacts Indian IT professionals.

• These measures, combined with other international tensions, have caused short-term pressure on the Indian stock market, including recent declines in the Sensex.

HSBC’s Positive Outlook

• Upgraded Rating: From "neutral" to "overweight".

• Support Factors:

  • Domestic investor resilience despite foreign fund outflows.

  • Government reforms and focus on capital expenditure.

  • Improved market valuations.

• HSBC notes that earnings may see a slight decline, but investor confidence and policy support provide a strong foundation for growth.

Regional Comparison

• China and Hong Kong: Overweight, with projected returns of 21% (China) and 16.4% (Hong Kong) by 2026.

• Korea: Underweight.

• ASEAN markets: Sluggish due to political uncertainties.

• Japan: Under pressure despite a weak yen.

Current Market Snapshot

• Sensex: 81,894.55 (down 200 points at 1 pm).

• Recent Performance:

  • Past six months: +5%

  • Current year: +4.33%

  • Past year: -3.50%

  • Past five years: +119%

HSBC’s report, Asia Equity Insights Quarterly, highlights that India has remained calmer than other Asian markets and domestic retail investors have played a key role in supporting the market.