International brokerage company HSBC upgraded Indian equities to "neutral" from "underweight", saying valuations were more reasonable and forecasting strong earnings growth into the new year. “Since end-August, India underperformed because of issues in local banks, currency weakness and oil price volatility,” HSBC analysts said in a note issued at the end of November. “Despite recent underperformance, these risks remain for Indian equity market. But investors' holdings now lowest relative to history, valuations more reasonable, 2019e (expected) earnings growth highest in region,” it said. It warned that a key risk is the country's dependency on a few large cap stocks for growth, mostly banks, with rising non-performing loans (NPLs) having the potential to quickly and significantly change India's earnings outlook. Other risks are that the currency could weaken, prompting more interest rates hikes by the Reserve Bank of India (RBI), and lower oil prices are supportive now but HSBC expects them to rise in 2019-20.