Sensex 2025-End Target To Be Hiked? HSBC's Herald Van Der Linde Bullish On India's Growth Story—Top Picks

The Indian stock market is swept with a sudden wave of optimism over the US Federal Reserve's interest rate cut expectations and the subsequent decline in the US 10-year bond yield. D-Street analysts believe the domestic levers with the proposed tax cuts. Amid a slowdown in economic growth and subdued demand, the government's next-generation GST reforms will likely induce a consumption uptick, especially during the festive season.

However, the government's policy interventions are packed against the current global headwinds due to the US tariff policy. The trade uncertainty has triggered volatility in the market with ongoing foreign capital outflows. However, in the current scenario, global market experts still see India as a 'bright spot' and stay bullish on domestic sectors for long-term growth.

Herald Van Der Linde, Head of Equity Strategy, Asia Pacific, HSBC said in an exclusive interview with NDTV Profit that the Sensex 2025-end target of 85,130 for the end of the year will likely be hiked with India's stable growth curve. While taking about the tariff impact of the Indian equity market, Linde also listed his top sectoral picks for eyeing long-term investments.

The global market veteran told NDTV Profit that HSBC's outlook on Indian markets has improved as a 'lot of worries that they had 12 months ago have now been ticked off'. Linde explained that with the upcoming GST rate cuts and the RBI's liquidity push with interest rate reductions, the demand concerns in the economy will likely be addressed in the near-term.

HSBC had pegged the year-end Sensex target at 85,130. The market expert expressed optimism that the target will likely be hiked. "The risk of increasing it is much higher than the risk of cutting it, so if I had to make chance, I think its going to up instead of lower, as the growth expectations started to work out to our advantage," Linde told NDTV Profit.

The HSBC top official also listed out his top sectoral picks in the Indian market. "In the long run, if you want to buy into India's growth story, then banks and consumers is where you want to be," he said, adding, "I would be cautious with sectors where policy and tariff risk is high, so the pharma sector is one where I'd be careful."

Linde explained that since the global market got a confirmation recently that the US Fed will cut interest rates in September, so that allowed the US bond yields to come off and interest rate bets to cool down. "Fed rate cuts are a continued process, but the question is where it will settle eventually."

He highlighted that since the US economic growth is slowing down so the US Fed will likely cut rates even beyond the September. "US bond yields start to come down and that's really important to the Asian equity markets. A bit of weaker dollar is also a positive for emerging markets."

Since interest rate cuts lead to a weaker dollar, hence precious metals such as gold and silver edge higher in the period. "Gold doesn't give anything, its a piece of metal. It doesn't give dividend, yields, or interest payments. If interest rates are high, it doesn't make sense to hold on to gold, but if rates go lower, then the relative attractiveness of gold improves," he said.

Coming to the Indian government's interventions to spur the domestic demand despite tariff risk, Linde noted that with weaker growth and low urban consumption in the last few months, "policymakers needed to do something."

The HSBC analyst added that "India is a large domestic economy, so the economic growth needs to be focused domestically". Linde concludes that the imposition of a high 50% tariff rate on India is 'unlikely'. The market expert is optimistic that the tariff rate likely come down after negotiations with the US.