New Delhi, March 27 -- Goldman Sachs has downgraded Indian equities to "market weight," citing a worsening macroeconomic outlook driven by persistently high energy prices and weaker earnings growth prospects.

In its India Strategy report dated March 26, Thursday, the global investment bank said that "higher-for-longer energy prices lead to deteriorating macro mix for India," as it raised oil and gas price forecasts amid continued disruption risks to Strait of Hormuz flows.

Reflecting India's vulnerability to energy shocks, Goldman Sachs noted that it has "lowered 2026 GDP growth by 1.1pp to 5.9%, raised CPI forecast by 70bp, widened current account deficit to 2% of GDP, weakened INR, and added 50bps rate hikes in 2026."

The brokerage a...