Stock market: Sensex at 94,000? HSBC says India Asia’s quiet corner, valuations no concern
On India, HSBC said while foreign funds have withdrawn significant amounts from India in the last 12 months, a period which the market has seriously underperformed, local investors have remained resilient.
- Sep 24, 2025,
- Updated Sep 24, 2025 9:03 AM IST
Global brokerage HSBC on Wednesday advised investors to avoid crowded trades like Korea and Taiwan and instead focus on Asia’s quieter corner: India. The firm set an end-2026 Sensex target of 94,000, implying a potential upside of 13.2 per cent.
HSBC noted that Asian markets have risen 20 per cent so far in 2025, despite significant selling by foreign funds. Similar to India, local investors across Asia - especially in mainland China, are sitting on large cash reserves, helping their domestic markets remain resilient.
"Another feature of Asian markets is overcrowded trades, especially in companies related to Al in north Asia. The concern is that even a small deviation from sky-high investor expectations might lead to sharp corrections," HSBC said.
On India, HSBC said while foreign funds have withdrawn significant amounts from India in the last 12 months, a period which the market has seriously underperformed, local investors have remained resilient.
"While earnings growth expectations can fall a little further, valuations are no longer a concern, government policy is becoming a positive factor for equities, and most foreign funds are lightly positioned. We think Indian equities now look attractive on a regional basis and upgrade the market to overweight (from neutral)," HSBC said.
On China, it said US tariffs will have little impact on the profits of most listed companies. After a strong run in Chinese equities, especially in Hong Kong, HSBC believes it is only natural to question whether this momentum will continue.
"Valuations are elevated, but not excessive. However, with retail investors siting on $22 trillion in cash, some of which is gradually being re-allocated to stocks, we expect Chinese equities to grind slowly higher. After the rally in H-shares -mainland Chinese investors have added a staggering $140 billion, more than double the annual average of $60 billion in the last three years in Hong Kong," HSBC said.
Global brokerage HSBC on Wednesday advised investors to avoid crowded trades like Korea and Taiwan and instead focus on Asia’s quieter corner: India. The firm set an end-2026 Sensex target of 94,000, implying a potential upside of 13.2 per cent.
HSBC noted that Asian markets have risen 20 per cent so far in 2025, despite significant selling by foreign funds. Similar to India, local investors across Asia - especially in mainland China, are sitting on large cash reserves, helping their domestic markets remain resilient.
"Another feature of Asian markets is overcrowded trades, especially in companies related to Al in north Asia. The concern is that even a small deviation from sky-high investor expectations might lead to sharp corrections," HSBC said.
On India, HSBC said while foreign funds have withdrawn significant amounts from India in the last 12 months, a period which the market has seriously underperformed, local investors have remained resilient.
"While earnings growth expectations can fall a little further, valuations are no longer a concern, government policy is becoming a positive factor for equities, and most foreign funds are lightly positioned. We think Indian equities now look attractive on a regional basis and upgrade the market to overweight (from neutral)," HSBC said.
On China, it said US tariffs will have little impact on the profits of most listed companies. After a strong run in Chinese equities, especially in Hong Kong, HSBC believes it is only natural to question whether this momentum will continue.
"Valuations are elevated, but not excessive. However, with retail investors siting on $22 trillion in cash, some of which is gradually being re-allocated to stocks, we expect Chinese equities to grind slowly higher. After the rally in H-shares -mainland Chinese investors have added a staggering $140 billion, more than double the annual average of $60 billion in the last three years in Hong Kong," HSBC said.