Jefferies has upgraded its market outlook for India, citing a resurgence in foreign equity inflows and accelerating credit growth that is pushing market momentum to its fastest pace in more than a decade.
The broker’s revised stance reflects a broader confidence in the Indian economy’s resilience, supported by central bank measures that have helped stabilize the rupee.
In a significant portfolio adjustment accompanying the upgrade, Jefferies removed HDFC Bank from its recommended holdings.
The move comes despite HDFC Bank, India’s largest private sector lender, reporting strong balance sheet expansion in the first quarter of fiscal 2027, with advances growing to ₹31.27 lakh crore in the April-June period.
The removal suggests Jefferies is rotating out of large-cap financials in favor of other sectors benefiting from the current credit cycle.
The broker’s analysis highlights the return of foreign capital as a key driver for the improved sentiment.