HSBC has raised its rating on India to ‘overweight’ from the earlier ‘neutral’ and upped its Sensex target to 28,500 from 26,000 for this year-end. Domestic market is picking up in India and earnings expectations of 12 percent are more realistic, says Herald Van Der Linde of HSBC. “India is a more defensive market,” he says, adding that earnings growth is expected in certain sectors like IT, private banks and rural-related companies.
A 4-5 percent upside is seen in the market from current levels. However, the domestic market still faces key risks like monsoon, to-be-appointed Reserve Bank governor, China and global events. Among global markets, HSBC is overweight on the US, but cautious on Europe and Japan. Post the UK referendum, impact on global companies has not been much, but domestic companies in the UK continue to suffer.
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