<div id="readability-page-1"><div id="parent_top_div">By Abhishek Vishnoi India stands out as one of the biggest losers as the artificial intelligence trade reshapes global investment flows. In a stark shift, the country’s stock market is on the verge of dropping out of the world’s five biggest for the first time in three years. Without the AI-driven rallies powering Taiwan and South Korea, there’s a growing risk that India falls further behind rather than regaining lost ground. The rationale goes far beyond Indian equities being relatively expensive or corporate earnings slowing. Global investors, who not long pushed India close to rivaling China in emerging-market portfolios, are now chasing themes the country’s market largely lacks: chip manufacturing, computing infrastructure and AI models. While India has talent, demand and digital scale, few of its corporate champions are directly linked to that buildout. That increasingly leaves the market tied to the domestic consumption story. “This isn’t a dip you buy,” said Gary Dugan, chief executive of Global CIO Office. “What markets haven’t fully priced yet is that this isn’t an earnings miss story in India, it’s a terminal value story. The assumptions about where these businesses are in 10 years have to change.” <div> Underscoring the scope of the revaluation, India’s weight in the MSCI emerging markets index has fallen to about 12 per cent from 19 per cent last year. Roughly two-thirds of the reallocation from India over the past 12 to 18 months reflects AI positioning, according to M&amp;G Investments. </div> As fund managers pared their exposure, foreign investors have been abandoning India at an accelerating pace, pushing their ownership to a 14-year low, according to Goldman Sachs Group Inc. calculations. They now hold less than domestic institutions for the first time in more than 20 years. The change in India’s fortunes has been stark. Its market value soared from pandemic lows to a record $5.73 trillion in September 2024, with the NSE Nifty 50 Index the world’s best-performing major market at the time. That narrative began to fray as concerns over stretched valuations made foreign flows increasingly volatile. Then came the AI boom, drawing investors away. Since the peak, $924 billion of market value has evaporated. This year, the pressures piled up as a surge in oil prices is worsening inflation risks and pressuring the rupee. Foreign investors are rushing to the exit — they have withdrawn a net $42 billion since the end of 2024. The rotation has been largely toward Korea and Taiwan, which provide a sharp contrast with their AI-powered equity benchmarks up 78 per cent and 42 per cent this year, respectively. India’s gauge is down more than 9 per cent, heading for its first annual drop after a decade of gains. The two North Asian markets are less than $500 billion away from overtaking India in equity market value. India’s case “While the world reprices around artificial intelligence, India’s headline indices remain anchored to the past — and global capital is taking note,” said Aadil Ebrahim, group head of equities at Klay Group. Until its stock markets “evolve to reflect a new generation of innovators, India will remain a structural underweight in the AI trade.” At the core of the divergence is the very basis of the India investment case. For decades, the working assumption was that the country would follow the East Asian playbook and climb the value chain from manufacturing to services, and then innovative technologies. But that last jump has always been the hardest to make. Perhaps the most poignant indicator of investors losing faith in India has been the rupee, which swooned to a record low against the dollar. That’s forced Prime Minister Narendra Modi to plead with citizens to cut fuel use and avoid unnecessary travel, in an attempt to buttress the exchange rate. “India is approaching a genuine strategic inflection point,” said Hebe Chen, an analyst at Vantage Global Prime. “The next phase of global growth is being shaped by AI infrastructure, compute power and technological ownership that India has not yet secured.” Instead, the very companies that have driven India’s success now increasingly look like liabilities. The stock market is heavily weighted toward IT services, a $315 billion industry led by Infosys Ltd. and Tata Consultancy Services Ltd. Their business model hinges on building and maintaining systems for global clients, a structure increasingly vulnerable as generative AI tools automate coding, testing and back-office functions. The NSE Nifty IT Index has dropped more than 26 per cent this year to around its lowest since 2023, caught in a broader global selloff in services and old-economy stocks exposed to AI disruption. <div> To be sure, some investors believe that the worst is already done after a prolonged slump. The IT industry’s Nifty weight has fallen to about 8 per cent from more than 17 per cent in early 2022. And the Adani Group is deploying its considerable resources for a data-center push. </div> “Much of that reset has already happened,” said Vikas Pershad, portfolio manager at M&amp;G. “What has not fully repriced is the assumption that India deserves a large multiple premium to emerging markets simply because its growth rate is higher.” The sustainability of that growth is in question, though. As many as 15 million Indians work in IT services and global capability centers, many in some of the country’s best-paying private jobs. A structural slowdown in hiring or a more fundamental shift in global demand for the services would ripple across the economy, into real estate, consumption, lending and the broader financial sector. And while the impact on the wider economy is yet to be felt, growth forecasts are already moderating, in a challenge to the narrative of India as a high-growth play. Gross domestic product will likely expand 6.5 per cent in 2027 and 2028 each after an average annual rate of 8.3 per cent in the last four years, the International Monetary Fund predicts. Earnings growth estimates for companies in the benchmark Nifty 50 in 2027 have roughly halved since the start of the year, according to Chiara Salghini, portfolio manager at Vontobel’s Quality Growth boutique. “The most dangerous thing about India’s current position is that the narrative is still optimistic enough that the urgency for that rethink hasn’t fully landed,” said Dugan at Global CIO Office.</div></div>

INDH

印度 MSCI ETF - iShares

印度 ETF - WisdomTree

標普印度漂亮 50 ETF - iShares

印度股市面臨跌出全球前五的風險，主要是由於其在人工智能驅動的投資熱潮中的缺乏參與。外國投資者正在撤資，導致其持股比例降至 14 年來的最低水平。印度在 MSCI 新興市場指數中的權重顯著下降，反映出市場向韓國和台灣等受益於人工智能的市場轉移。印度盧比也創下歷史新低，促使政府進行干預。分析師建議，印度市場需要發展以吸引關注人工智能的全球資本

India missed out on AI and now its run as 'market darling' may be over

Business Standard

WisdomTree India Hedged Equity

高盛

印孚瑟斯技術

GS Hldg R

印度錯過了人工智能的發展，現在它作為 “市場寵兒” 的時代可能已經結束