JPMorgan: India could draw about $115 billion if foreigners end their underweight, as it emerges as an 'AI hedge'
India's Nifty 50 has gained nearly 9% in a month while AI-heavy US, Japanese, South Korean and Taiwanese markets are deep in the red; Goldman Sachs' Tim Moe says India has been dubbed 'the anti-AI trade'.
Why it matters
Foreign investors have been underweight India for almost two years because of high valuations, subdued earnings growth and a lack of local AI champions, CNBC reports. JPMorgan's Rajiv Batra says falling oil prices, lower US Treasury yields, recovering company earnings and the unwinding of the global AI trade now favour the country. On Friday, India's benchmark indexes traded higher while Japan's Nikkei 225 and Taiwan's Taiex entered bear territory and the Nasdaq Composite fell into correction. The $115 billion figure is Batra's scenario for what would happen if long-only foreign funds neutralised their underweight, not a forecast of actual flows.
Key facts
- Nifty 50 up nearly 9% over the past month
- JPMorgan: about $115bn potential net inflows if long-only foreign funds neutralise their underweight
- Foreigners underweight India for almost two years
- Nikkei 225 and Taiex entered bear territory on Friday
- Kospi deepened its bear market; Nasdaq Composite fell into correction
- Goldman Sachs' Tim Moe: India 'dubbed the anti-AI trade'