Global investment brokerages are increasingly turning bullish on Indian equities, encouraged by improving corporate earnings prospects, more reasonable valuations and the possibility of foreign capital shifting away from AI-heavy markets towards economies supported by domestic demand. However, differences in market outlook remain, with brokerage Nifty targets reflecting varying expectations about the sustainability of the ongoing recovery.

HSBC has upgraded India to Overweight from Neutral, citing resilient corporate earnings, stronger credit growth and relatively attractive valuations. The brokerage believes India could emerge as a diversification opportunity for global investors seeking to reduce exposure to Asian markets heavily concentrated in artificial intelligence-linked stocks. HSBC also highlighted the potential for foreign portfolio inflows, noting that only around 22 percent of global emerging-market funds are currently overweight India.

Citi has raised its end-2027 Nifty target to 28,000 from 26,000, implying an upside potential of approximately 12 percent. The brokerage expects annual corporate earnings growth of 15 to 16 percent through FY28 to support the market. Lower crude oil prices could further ease inflationary pressures and improve India's current account position, while a moderation in global AI capital expenditure may encourage investors to diversify their allocations towards Indian equities.

Citi estimates that every 100-basis-point increase in India's active weight among emerging-market funds could potentially generate approximately $12 billion in foreign inflows.

Jefferies has also increased India's recommended allocation in its Asia-Pacific ex-Japan portfolio by two percentage points to 14 percent. The brokerage has simultaneously reduced its allocations to South Korea and Taiwan, reflecting a preference for markets with stronger domestic demand and relatively lower dependence on the global AI supply chain.

JPMorgan has maintained its base-case Nifty target of 27,000 for early 2027. The brokerage expects a potential reversal in foreign investors' underweight positions in Indian equities, which could support meaningful capital inflows if global funds begin rebuilding their exposure to the domestic market.

Goldman Sachs remains among the more bullish global brokerages, with a Nifty target of 29,000 for end-2026. Its outlook dates back to November 2025, when it upgraded India to Overweight, citing expectations of an earnings recovery and stronger economic growth.

However, Bernstein has adopted a more cautious position, reducing its December 2026 Nifty target to 25,000 while retaining a Neutral rating. The brokerage believes Indian equities continue to trade at demanding valuations relative to their earnings growth prospects and argues that the recent market rally may already reflect a substantial portion of the anticipated earnings improvement.

One of the key factors behind the improving outlook for Indian equities is the possibility of a global capital rotation away from AI-linked markets. South Korea and Taiwan have attracted substantial investment flows due to their exposure to the global semiconductor and artificial intelligence supply chains. However, growing concerns about the returns generated by massive AI capital expenditure have encouraged investors to reconsider portfolio diversification.

India's relatively lower exposure to the global AI trade, combined with its domestic consumption, credit growth and economic expansion, is increasingly attracting attention as an alternative investment destination.

The shift in sentiment comes as Indian equities recover from their earlier underperformance. Although the Nifty remains approximately 5 percent lower in 2026, it has gained around 12 percent month-to-date, 4 percent over three months and 10 percent over six months. During recent comparison periods, the benchmark has also outperformed several major global indices, including South Korea's KOSPI, Taiwan's equity benchmark, Japan's market and the MSCI Emerging Markets index.

The contrasting brokerage assessments highlight two important factors that will determine the sustainability of the Indian equity market recovery: the ability of corporate earnings to deliver the expected growth and the extent to which foreign portfolio investors return to domestic equities.

While improving earnings visibility and potential foreign inflows provide support to the bullish outlook, valuation concerns and global capital allocation trends remain important risks for investors.