Why HSBC sees Sensex at 94,000 by December 2026; check 3 key reasons

While retaining its bullish view on the Indian equity market, HSBC believes that the benchmark equity index—BSE Sensex—may touch the 94,000-mark by December 2026. This shows an upside of 13% against the current levels of 83,176. The global financial services firm believes that earnings recovery, valuations and foreign inflows will support the market in the coming months. On a year-to-date basis, Sensex and Nifty50 have gained 6.6% and 7.89%, respectively, till November 6.

HSBC, in a report, said that earnings have bottomed in India, and it may see a broad-based recovery in calendar year 2026. “Consensus has pencilled in EPS growth of 15% for the calendar year 2026, with reduced risks of downgrades compared to 2025. Banks were a large drag on growth this year, but as time deposits are rolled over, margins should expand in the coming quarters,” HSBC said.

The overseas firm also added that encouraging management commentary suggests a positive outlook for tech companies. Consumer names, including autos, should benefit from GST cuts, weaker inflation and lower interest rates, although the sustainability of the tax cut impact remains to be seen.

On the valuations front, HSBC highlighted that valuations are not as much of a headwind as they were a year ago. They have come off after recent underperformance, both against India’s own history but also relative to other major Asian peers. “India now offers value versus Chinese equities,” it said.

HSBC also thinks that the country should see incremental foreign inflows in the coming months. Data available with Ace Equity showed that FIIs have sold shares worth Rs 1.49 lakh crore so far in 2025.

“Foreign investors have heavily gravitated towards AI names in Asia in recent months, and some of that was funded by cutting their exposure to India. As a result, India is now the biggest underweight in GEM portfolios and only a quarter of the funds we track are overweight India vs their benchmark. We see India as a good AI hedge and provides diversification for those who feel uncomfortable with the AI rally. India will be an outsized beneficiary of any additional money coming into the EM region,” HSBC said.