Jan 9 Reuters HSBC cut its rating on Indian equities to neutral on Thursday, joining a growing list of global brokerages that have tempered their bets on Asia39;s thirdlargest economy on slowing growth and elevated valuations.

The brokerage slashed its end2025 target for the BSE Sensex by 5 to 85,990. That implies a 10 upside for the benchmark, which was trading at 77,700 levels on Thursday.

The cyclical growth slowdown and elevated valuations have capped the upside in the near term… and we see muted market returns in 2025, HSBC said in a note.

Last year, Goldman Sachs and Bernstein Quants downgraded Indian stocks, citing a slowdown in economic and corporate activity.

However, there are also few hopefuls. Brokerages Citi and Morgan Stanley have forecast doubledigit returns from Indian stocks, while Motilal Oswal said it sees healthy corporate earnings growth in FY26.

India, in January, forecast an annual growth of 6.4 in the financial year ending in March, the slowest in four years, dragged by a weaker manufacturing sector and slower corporate investments.

After hitting multiple record highs until September last year, the Sensex and the Nifty 50 index pulled back as foreign funds exited richlyvalued domestic stocks after top firms registered their worst quarterly showing in more than four years.

The benchmarks, which posted their ninth straight annual gain in 2024, are trading about 10 lower than their record highs.

Banks, which have the largest weightage in…