Forget the AI gold rush – it’s India’s time to shine again. As the overhyped AI sector loses steam worldwide, a fresh analysis predicts a surge of foreign investment flowing back into Indian stocks.
What started as boundless optimism around generative AI has morphed into skepticism. Sky-high expectations met reality, triggering selloffs in overvalued tech behemoths. FIIs, burned by the volatility, are reassessing their strategies.
India emerges as the prime beneficiary. Undervalued relative to peers, boasting strong corporate earnings, and backed by pro-business reforms, the market beckons. The report quantifies the opportunity: potential inflows exceeding last year’s outflows.
Focus areas include traditional sectors overlooked during the AI frenzy – think autos, metals, and energy. Mutual funds and ETFs are already positioning for the shift.
Drawing from data across 15 years, the analysis reveals cycles where tech corrections boost EM allocations. India’s share in global FII portfolios could rise from 5% to 8%.
Policymakers in New Delhi are optimistic, with recent budget measures enhancing investor confidence. While not without risks, this pivot from AI hype to Indian fundamentals could mark the start of a multi-year bull run.