The global artificial-intelligence (AI) trade, valued at around US$25 trillion, is showing signs of fatigue as the Bloomberg AI Index fell about 4% after a 34% rise over the past three months.
This cooling of the AI-theme rally is causing investors to reassess valuations of AI-linked stocks and could redirect capital flows toward markets that have not significantly participated. India’s BSE Sensex, which has lagged international peers, fits this profile and may benefit from renewed interest.
Analysts point out that India’s equity market hasn’t been part of the frothier AI run-up, and with global capital looking for diversification, investor attention may shift to the Indian market’s relatively undervalued segments.
The implication: the Sensex could shed its tag as one of the “worst-performing” major indices if global funds reallocate away from over-valued AI stocks and into emerging markets like India that offer more stable fundamentals.
In summary, while the AI trade slowdown raises questions for tech-heavy markets, it may open an opportunity window for India’s broader market to stage a comeback.
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