India remains a bright spot for investment globally in the third quarter this year (Q3 2025), backed by resilient domestic consumption, favourable trade dynamics and supportive monetary policy, an HSBC Global Private Banking report said on Tuesday, adding that India’s GDP is projected to grow at 6.2 per cent in 2025, making it the fastest-growing major economy.
HSBC said in its latest investment outlook that it retains a mild overweight on Indian equities and local currency bonds. Within equities, it prefers large-cap stocks and favours more domestically oriented sectors and favour the financials, healthcare and industrial sectors.
“India’s economic resilience, underpinned by strong domestic consumption, favourable trade dynamics, and accommodative monetary policy, sets the stage for a promising second half of 2025,” the report noted.
The bank set out how investors should continue to expect the unexpected, even after the roller-coaster ride in the markets so far this year. With the high volume of US policy announcements, investors are likely to continue seeing two-way market volatility.
“While we acknowledge the elevated global uncertainty, we expect India’s GDP to grow at 6.2 per cent in 2025, making it the fastest growing major economy,” said James Cheo, Chief Investment Officer for South East Asia and India at HSBC Global Private Banking and Premier Wealth.
Resilient domestic investor-base, and recent foreign investor flows point towards supportive technical, he added.
The four priorities going into Q3 2025 for investors include diversified equity exposure, opportunities in AI adoption, mitigating currency risks, and tapping into Asia’s domestic growth.
“Investors should develop portfolios that are resilient to political and market surprises to navigate the uncertain economic climate,” the report added.
“While we expect to see lower US growth this year, the economy should not slide into recession or stagflation. Earnings growth expectations have already been reduced, and valuations are reasonable at around historical averages,” said Willem Sels, Global Chief Investment Officer at HSBC Global Private Banking and Premier Wealth.
