HSBC Upgrades Indian Equities and Downgrades Chinese Markets
HSBC upgraded Indian equities to overweight while downgrading Chinese equities to neutral, citing India's strengthening investment outlook and China's property sector stress.
Global financial services firm HSBC upgraded Indian equities to overweight from neutral, citing resilient corporate earnings, attractive valuations following a market correction, and strong credit growth. In a report titled “Why so down on India?”, the bank noted that nearly 70% of its tracked growth indicators signaled expansion in the latest quarter, with commercial sector funds rising to 6.6% of GDP between April and September 2026.
HSBC identified banking, capital goods, cement, ports, and electronic manufacturing as preferred sectors. The firm highlighted strong government infrastructure spending and rebounding exports, though it warned that heatwaves and rainfall shortages have weakened rural demand. The bank suggested that a cooling of global energy prices could provide relief to corporate margins and noted that only 22% of global emerging market funds currently hold overweight positions in India.
Simultaneously, HSBC downgraded Chinese equities to neutral from overweight. The brokerage attributed this shift to weak consumer confidence, subdued domestic investment, and ongoing stress in the property sector, stating there is a lack of significant near-term measures to revive underlying growth.
