Stock market outlook: Why HSBC, JPMorgan downgraded Indian equities; Nifty target
India's valuations have fallen materially from their peak, but they will rise again as earnings cuts come through, HSBC warned.
- Apr 24, 2026,
- Updated Apr 24, 2026 8:42 AM IST
Stock market outlook: Foreign brokerages HSBC and JPMorgan have downgraded Indian equities, saying domestic stocks look less attractive than peers. JPMorgan has lower India's rating to 'Neutral' from 'Overweight'. HSBC, on the other hand, said it would fund its Korea upgrade by downgrading India to 'Underweight' from 'Neutral', as potential inflation and demand pressures are likely to impact earnings growth. It added that foreign investor sentiment is likely to remain cautious on India amid weakening growth and forex pressure.India's valuations have fallen materially from their peak, but they will rise again as earnings cuts come through, it warned.
Without the anticipated cyclical acceleration in growth, valuations are likely to remain a constraint, HSBC said. "While we continue to see opportunities among private banks, base metals, and select healthcare companies (Three buckets of stocks to beat the oil shock), the relative case for Indian equities has weakened as these headwinds erode India’s standing versus the rest of the region," HSBC said.
JPMorgan, a report by CNBC TV-18 suggested, said the downgrade was driven by elevated valuations relative to emerging market peers, along with earnings risks, dilution concerns, and limited exposure to next-generation technologies. JPMorgan reportedly cut its bull case Nifty target to 30,000 from 33,000 earlier. Its base case target has been slashed to 27,000 from 30,000 earlier. The bear case price target now stands at 20,500 against 24,000 earlier.
HSBC said domestic demand, especially via the SIP (Systematic Investment Plan) channel remains resilient, but a pick-up in IPO activity after a seasonally weak Q1 warrants a return of foreign demand.
"While we continue to see opportunities among private banks, base metals, and select healthcare companies (Three buckets of stocks to beat the oil shock), the relative case for Indian equities has weakened as these headwinds erode India’s standing versus the rest of the region," it said.
HSBC said the ongoing West Asia conflict has refocused attention on downside growth risks, given India’s significant reliance on imported energy. Growth has showed signs of improvement in the last two quarters, but it believes the recovery from hereon will be delayed.
The foreign brokerage said while the Indian government and SOEs have absorbed much of the impact so far, its economists expect retail petrol and diesel prices to be revised higher once state elections conclude – most likely in early May.
Domestic demand, especially via the SIP (Systematic Investment Plan) channel remains resilient, but a pick-up in IPO activity after a seasonally weak Q1 warrants a return of foreign demand
Stock market outlook: Foreign brokerages HSBC and JPMorgan have downgraded Indian equities, saying domestic stocks look less attractive than peers. JPMorgan has lower India's rating to 'Neutral' from 'Overweight'. HSBC, on the other hand, said it would fund its Korea upgrade by downgrading India to 'Underweight' from 'Neutral', as potential inflation and demand pressures are likely to impact earnings growth. It added that foreign investor sentiment is likely to remain cautious on India amid weakening growth and forex pressure.India's valuations have fallen materially from their peak, but they will rise again as earnings cuts come through, it warned.
Without the anticipated cyclical acceleration in growth, valuations are likely to remain a constraint, HSBC said. "While we continue to see opportunities among private banks, base metals, and select healthcare companies (Three buckets of stocks to beat the oil shock), the relative case for Indian equities has weakened as these headwinds erode India’s standing versus the rest of the region," HSBC said.
JPMorgan, a report by CNBC TV-18 suggested, said the downgrade was driven by elevated valuations relative to emerging market peers, along with earnings risks, dilution concerns, and limited exposure to next-generation technologies. JPMorgan reportedly cut its bull case Nifty target to 30,000 from 33,000 earlier. Its base case target has been slashed to 27,000 from 30,000 earlier. The bear case price target now stands at 20,500 against 24,000 earlier.
HSBC said domestic demand, especially via the SIP (Systematic Investment Plan) channel remains resilient, but a pick-up in IPO activity after a seasonally weak Q1 warrants a return of foreign demand.
"While we continue to see opportunities among private banks, base metals, and select healthcare companies (Three buckets of stocks to beat the oil shock), the relative case for Indian equities has weakened as these headwinds erode India’s standing versus the rest of the region," it said.
HSBC said the ongoing West Asia conflict has refocused attention on downside growth risks, given India’s significant reliance on imported energy. Growth has showed signs of improvement in the last two quarters, but it believes the recovery from hereon will be delayed.
The foreign brokerage said while the Indian government and SOEs have absorbed much of the impact so far, its economists expect retail petrol and diesel prices to be revised higher once state elections conclude – most likely in early May.
Domestic demand, especially via the SIP (Systematic Investment Plan) channel remains resilient, but a pick-up in IPO activity after a seasonally weak Q1 warrants a return of foreign demand