HSBC upgrades its outlook on Indian stocks, raising its Sensex index target to 84,000 points.

HSBC upgraded its recommendation on the Indian stock market to “Neutral” and raised its Sensex index target to 84,000 points, citing reduced oil price risk and strong domestic consumption.

On July 16, 2026, at 1:36 PM, Bloomberg News reported that HSBC Holdings Plc. upgraded its outlook on the Indian stock market from “Underweight” to “Neutral” after assessing that the risk from oil prices that had previously pressured the earnings of listed companies had significantly decreased, while domestic consumption remained strong, resulting in an improved outlook for the Indian economy and stock market.

HSBC strategists, led by Herald van der Linde, stated that India's macroeconomic outlook has improved significantly in recent weeks, particularly after the shock from oil prices subsided faster than expected. They view India as one of the best markets for investment to benefit from growth driven by domestic demand.

Previously, HSBC downgraded its recommendation on Indian stocks to Underweight in April due to concerns that a war with Iran would drive inflation through energy prices. However, the bank has now become one of the first global financial institutions to upgrade its outlook as these concerns have eased.

At the same time, HSBC also revised its year-end target for the BSE Sensex index upwards to 84,000 points from the previous 80,500 points, representing an upside of approximately 8.8% from Wednesday's closing level.

Data compiled by Bloomberg indicates that foreign investors made net purchases of approximately US$1,800 billion worth of Indian stocks this month, the highest among Asian emerging markets. This was driven by lower volatility, less concentration of large-cap stocks, and expectations of accelerating corporate earnings growth.

Previously, the Indian stock market was one of the worst-performing markets in Asia, following the conflict in the Middle East which drove up energy prices due to India's heavy reliance on crude oil and liquefied petroleum gas imports. As a result, the Sensex index plummeted by more than 15% at one point during a year.

However, HSBC warns that a renewed escalation of tensions in the Middle East, impacting energy supplies, could drive up oil prices and put renewed pressure on the Indian stock market. Furthermore, rural consumer demand and the risks associated with El Niño remain factors to monitor.

In addition to India, HSBC also downgraded its recommendations for the Malaysian and Philippine equities from Neutral to Underweight, citing a lack of new positive catalysts. Meanwhile, it maintained a Neutral view on the South Korean equity and continued to maintain an Overweight rating on mainland China and Hong Kong.

Reference: bloomberg.com

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