HSBC upgrades Indian equities to overweight from neutral
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HSBC Global Investment Research shifted its stance on Indian equities Wednesday, raising the market to overweight from neutral due to attractive regional valuations.
The firm noted that US tariffs would minimally affect most listed companies’ profits. Despite foreign investors withdrawing substantial funds over the past year—a period marked by underperformance—domestic investors demonstrated consistent support.
“Although earnings forecasts might see minor adjustments, valuations are now balanced given supportive government policies and light foreign positioning,” the research firm stated.
While foreign investors remained net sellers across Asia in 2024, local retail inflows drove regional markets up by an average of 20%. Chinese equities, particularly in Hong Kong, face uncertain momentum after recent gains.
“Chinese valuations remain elevated yet reasonable. With $22 trillion in household cash reserves gradually shifting toward equities, we anticipate modest gains,” HSBC explained.
Investors continue targeting AI-related opportunities in Japan, Korea, and Taiwan—though Korean and Taiwanese markets now appear crowded. Japanese equities benefited from yen weakness, while corporate governance reforms in Japan and Korea offer long-term potential but lack short-term momentum.
ASEAN markets face headwinds as political developments dominate Thailand and Indonesia. The latter faces scrutiny over fiscal discipline following recent cabinet changes.
(With inputs from IANS)
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