Stock market: HSBC upgrades India to 'Overweight', cuts China rating to 'Neutral'; here's why
Stock market: In a note on November 6, HSBC said investors have looked elsewhere for action. But, given recent jitters, it's worth to widen the perspective again, it said.
- Nov 9, 2026,
- Updated Nov 9, 2026 8:20 AM IST
Stock market today: HSBC has upgraded India's rating to 'Overweight' from 'Neutral', citing resilient earnings and more reasonable valuations, while downgrading mainland Chinese equities to 'Neutral' from 'overweight' due to a lack of catalysts for a sustained re-rating.
HSBC said India offers diversification and low volatility in Asian markets dominated by AI stocks. While high oil prices and El Niño remain risks, it said such risks are unlikely to materially weaken overall investor sentiment.
HSBC sees opportunities in Indian banks, industrials, consumer discretionary stocks, insurers and hospitals, Bloomberg reported.
In a note on November 6, HSBC said investors have looked elsewhere for action. "But, given recent jitters, it's worth to widen the perspective again. That's where India comes in, bypassed by much of global capital in recent quarters. The challenges, in investors' minds, are easy to recount: the absence of a vibrant AI hardware sector, the risk that services exports might suffer as AI is adopted more widely, and the spike in global energy prices, which historically hit India hard. Well, time for a rethink," it said.
HSBC said India's economy has weathered the challenges so far with remarkable ease. After a little pull-back earlier this year, around the height of the conflict in the Middle East, activity has bounced back, HSBC said in a note.
"For one, India has managed to cushion the economy from higher energy prices, with the current account deficit not blowing out as in previous such episodes. That is in part being helped by the continued, robust rise in services exports, which have yet to show, in aggregate, an adverse impact from AI. Meanwhile, private credit growth and corporate revenue growth have rebounded of late, car sales are strong, and government infrastructure spending continues to push higher," HSBC said.
The story, therefore, should not be one of concern about India losing its way in a world of AI, but one of remarkable resilience and, yes, opportunity, said
On China, HSBC said lower valuations and recent policy support were insufficient to drive a sustained re-rating. Weak consumer confidence, property market pressures, and softer domestic investment continue to weigh on growth, while subdued southbound flows and declining margin financing point to weaker investor appetite,” the brokerage said.
Within China, HSBC prefers banks, consumer stocks with attractive bond yields, biotech and AI-related technology hardware firms.
Stock market today: HSBC has upgraded India's rating to 'Overweight' from 'Neutral', citing resilient earnings and more reasonable valuations, while downgrading mainland Chinese equities to 'Neutral' from 'overweight' due to a lack of catalysts for a sustained re-rating.
HSBC said India offers diversification and low volatility in Asian markets dominated by AI stocks. While high oil prices and El Niño remain risks, it said such risks are unlikely to materially weaken overall investor sentiment.
HSBC sees opportunities in Indian banks, industrials, consumer discretionary stocks, insurers and hospitals, Bloomberg reported.
In a note on November 6, HSBC said investors have looked elsewhere for action. "But, given recent jitters, it's worth to widen the perspective again. That's where India comes in, bypassed by much of global capital in recent quarters. The challenges, in investors' minds, are easy to recount: the absence of a vibrant AI hardware sector, the risk that services exports might suffer as AI is adopted more widely, and the spike in global energy prices, which historically hit India hard. Well, time for a rethink," it said.
HSBC said India's economy has weathered the challenges so far with remarkable ease. After a little pull-back earlier this year, around the height of the conflict in the Middle East, activity has bounced back, HSBC said in a note.
"For one, India has managed to cushion the economy from higher energy prices, with the current account deficit not blowing out as in previous such episodes. That is in part being helped by the continued, robust rise in services exports, which have yet to show, in aggregate, an adverse impact from AI. Meanwhile, private credit growth and corporate revenue growth have rebounded of late, car sales are strong, and government infrastructure spending continues to push higher," HSBC said.
The story, therefore, should not be one of concern about India losing its way in a world of AI, but one of remarkable resilience and, yes, opportunity, said
On China, HSBC said lower valuations and recent policy support were insufficient to drive a sustained re-rating. Weak consumer confidence, property market pressures, and softer domestic investment continue to weigh on growth, while subdued southbound flows and declining margin financing point to weaker investor appetite,” the brokerage said.
Within China, HSBC prefers banks, consumer stocks with attractive bond yields, biotech and AI-related technology hardware firms.