Mumbai, January 9, 2025: HSBC has downgraded its outlook on the Indian stock market for 2025 from ‘Overweight’ to ‘Neutral,’ citing concerns over high valuations and slower earnings growth. The firm revised its Sensex target to 85,990 by the end of 2025, down from 90,520, reflecting a 10.03% upside from the January 8 closing level. HSBC also reduced its FY25 earnings growth forecast for the Nifty 50 index to 5%, from 15%, due to a deceleration in earnings and elevated valuations that could limit market gains.
However, HSBC acknowledges India’s strong structural factors, such as its young demographic, expanding consumer base, and record-high foreign exchange reserves, which offer stability. While some firms like Goldman Sachs and Bernstein Quants have expressed caution, others like Citi and Morgan Stanley remain optimistic, forecasting double-digit returns for the Indian market.
