Global brokerages HSBC, Citigroup, and Jefferies upgraded their outlook on Indian equities. They said, "India offers diversification and low volatility in Asian markets dominated by AI stocks." Strong earnings and foreign inflows helped the market. Citigroup expects the Nifty 50 to reach 28,000 by the end of 2027, showing growth.
Synopsis
Global brokerages HSBC, Citigroup, and Jefferies have upgraded their outlook on Indian equities. They cite improving earnings prospects and attractive valuations as key factors for this optimism. Recent foreign fund inflows and reduced oil prices further support this positive sentiment. Citigroup anticipates significant growth in the Nifty 50 by the end of 2027. Overall, Indian equities are poised for a sharp recovery in the coming years.
Mumbai: Global brokerages HSBC, Citigroup and Jefferies have turned more bullish on Indian equities, citing improving earnings prospects, attractive valuations, and the potential for foreign fund inflows as the market stages a sharp recovery.
HSBC Holdings has upgraded Indian equities to Overweight from Neutral, citing resilient corporate earnings and more reasonable valuations. "India offers diversification and low volatility in Asian markets dominated by AI stocks," HSBC said in its latest note. The brokerage favours banks, industrials, consumer discretionary companies, insurers and hospitals.
Citigroup expects the Nifty 50 to reach 28,000 by end-2027, citing a strong earnings outlook, lower oil prices and the prospect of slower artificial intelligence-related capital expenditure as factors supporting Asian equities. The target implies an upside of 12%.
Jefferies has raised India's weight in its Asia-Pacific ex-Japan relative-return portfolio by two percentage points to 14% from 12%, while retaining its Overweight stance. The brokerage has also cut its allocations to South Korea and Taiwan by one percentage point each, maintaining Underweight positions in both markets.
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The upgrades come amid a sharp recovery in Indian equities, supported by lower crude oil prices, a correction in AI-related stocks across global markets and renewed foreign investor buying. Foreign investors have bought around $4 billion worth of Indian equities during the recent rally.
Since October 23, the Sensex and Nifty have gained 10.8% each, while the BSE 150 MidCap and BSE 250 SmallCap indices have advanced around 8% each.
Citigroup sees significant scope for foreign investor positioning in India to recover. A one-percentage-point increase in active fund allocations to the country could generate around $12 billion in inflows, according to the brokerage.
The brokerage expects Nifty earnings to grow 15-16% annually in financial years 2026-28. It also estimates that a $10 decline in crude oil prices could boost Nifty earnings per share by around 2%, supporting corporate profitability and economic growth.
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(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
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