HSBC upgraded Indian equities to "Neutral" from "Underweight" Thursday as easing crude oil prices reduced earnings risks for the world's third-largest crude importer. The brokerage raised its 2026-end target for the BSE Sensex to 84,000 from 80,500, implying an 8.6% upside. Brent crude futures have fallen 33% from their April peak of $126.41 following an interim U.S.-Iran agreement.

The upgrade mirrors Goldman Sachs' positive view earlier this month citing lower commodity prices and a stable rupee. Foreign investors bought $1.6 billion of Indian shares in July, turning net buyers after four months of selling. However, they have sold $27.7 billion in 2026 year-to-date, exceeding last year's $18.9 billion record outflow.

Despite recent gains, Indian equities remain down 7.7% year-to-date, lagging the MSCI Asia-Pacific ex-Japan index up 21%. HSBC favors private banks, consumer discretionary, real estate, commodities, and select industrials. The brokerage notes South Korea remains Asia's strongest growth story but warns leverage and concentrated positions may sustain volatility.