HSBC Global Investment Research has upgraded India’s equity market to overweight from neutral, citing strong regional attractiveness. The firm stated that US tariffs will have minimal impact on the profits of most Indian listed companies.
Despite significant foreign fund outflows in the past year, domestic investors have remained resilient. The report noted that while earnings growth may slow slightly, government policies are providing a positive boost for equities, and most foreign funds remain lightly positioned.
The report highlighted that foreign investors have mostly sold in Asian markets this year. Yet, Indian equities have gained about 20 per cent due to steady inflows from retail investors. Meanwhile, momentum in Chinese equities may slow despite recent gains, especially in Hong Kong.
HSBC also commented on other Asian markets. Japan, Korea, and Taiwan attract investors via AI-focused trades, though Korea is now crowded. ASEAN markets face low investor confidence, influenced by political issues in Thailand and Indonesia. Valuations in Japan and Korea have risen, and the weaker yen has supported Japanese equities.
