HSBC downgrades India to ‘underweight’ as oil shock clouds earnings recovery
HSBC downgraded Indian equities to "underweight" from "neutral" – its second cut in less than a month – as it expects surging energy prices triggered by the Middle East war to threaten the durability of the country's earnings recovery. Brent crude is up 42% since the war started in late February and is currently trading above $100 a barrel, raising inflation and growth risks for the world's third-largest oil importer.
"India now looks less attractive than North East Asian peers in the current macro setting," HSBC said in a note on Thursday, with the benchmark Nifty 50 and Sensex falling 6.7% and 7.9% so far this year – among the worst performing markets globally.
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