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HSBC has cut BSE index target to 30,500 by 2017-end from its previous forecast of 32,400.
The target cut reflects fall in Indian equities since announcement of banknote ban and Trump's win on November 8.
The BSE is down 4.3 per cent since November 8.
HSBC said it maintained “overweight” rating on Indian equities, saying “fundamentals are strong".
It added that India has less exposure to dollar-denominated debt and balance of payments is “sound".
It also said forex reserves are “substantial,” and rupee is less reliant on trade with the United States.
Stating that cash crunch could normalise in the next 4-6 weeks, HSBC said long-term structural reforms were under way.
HSBC said that it is “overweight” on consumer staples, financials, energy sectors; “underweight” on industrials, materials and telecoms.
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