Global markets suffered a severe contraction, highlighted by a 5.6% Nasdaq drop and a $3 trillion loss across S&P 500 firms following doubts over AI investment returns. India is benefiting from this downturn as an alternative trade, drawing massive foreign capital back into local shares alongside a stable currency. Foreign portfolio investors channeled nearly ₹15,000 crore into the market during a single Thursday session, marking their biggest daily purchase in over a year. Institutional participants are overwhelmingly favoring large-cap equities in the banking, auto, and domestic tech spaces over riskier small-cap shares.
Key points
Global supply chain leaders like Nvidia, TSMC, Samsung, and SK Hynix fell sharply amid in…: Global supply chain leaders like Nvidia, TSMC, Samsung, and SK Hynix fell sharply amid investor skepticism over artificial intelligence infrastructure costs.
India's limited exposure to the artificial intelligence hardware supply chain has positio…: India's limited exposure to the artificial intelligence hardware supply chain has positioned the market as an attractive defensive destination for rotating global capital.
Institutional inflows are primarily driving large-cap equities across the financial, tech…: Institutional inflows are primarily driving large-cap equities across the financial, technology, and automobile sectors due to appealing valuations and robust earnings.
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The selloff followed a 5.6% plunge in the Nasdaq, which recorded its worst day in the last 19 months as $3 trillion was wiped off S&P 500 companies. Investors are increasingly concerned that political resistance to massive data centre investments and doubts over the returns from enormous artificial intelligence spending could slow the AI infrastructure boom.
“The bloodbath in the US markets will impact most other markets today, but India is likely to be the least impacted,” said Dr. V K Vijayakumar, chief investment strategist at Geojit Investments.
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The sharp deceleration in the AI trade could instead benefit India, he said, adding that foreign investor buying and stronger than expected corporate earnings are providing fundamental support to the market.
“The big rout of 5.6% in Nasdaq was triggered on concerns of a big slowdown in data centre spending since the Democrats are opposed to massive data centre investment,” Vijayakumar said. “This tech rout, particularly the…
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