HSBC Upgrade India to OVERWEIGHT from Neutral

India up, China down India now offers resilient earnings and more reasonable valuations While high oil prices and El Niño remain risks, they are unlikely to materially weaken overall sentiment See strong credit growth, resilient earnings and measures supporting growth and the currency While the coming quarters could see modest downgrades if energy prices remain elevated Don’t expect these to be significant enough to affect overall sentiment India offers diversification and low volatility in Asian markets dominated by AI stocks Favour high-quality growth names in domestically driven sectors – financials, autos, retail, services, and hospitals – where demand remains firm Most preferred sectors – Financials, Consumer Discretionary including autos, Real Estate, Industrials and Hospitals Least preferred sectors – IT, Consumer Staples, Oil & Gas, Utilities, Pharma Downgrade China to Neutral as though lower valuations and recent policies offer support, re-rating catalysts are limited

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