Global banking giant HSBC has revised its Sensex forecast for December next year, citing multiple economic pressures. The bank has lowered its target to 76,130 from an earlier projection of 78,870. This adjustment reflects concerns over reduced household savings impacting urban consumption, an inflationary backdrop, and weaker rural spending due to inconsistent monsoon seasons. Moreover, the software sector’s demand is experiencing a slowdown due to the current global economic challenges.
Despite these factors and a significant decrease in savings rates to a level not seen in fifty years, HSBC maintains an “overweight” stance on Indian equities. The bank predicts potential gains of nearly 16%. Driving this optimism are robust government spending and healthy foreign direct investment (FDI) inflows that are expected to stimulate the market. Additionally, HSBC is banking on earnings growth spurred by India’s increasing role in diversifying global supply chains and other strategic long-term growth drivers.
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