Foreign investors could turn their attention back to India as capital rotates across emerging markets (EMs), although the country's premium valuations and an uncertain earnings recovery are likely to remain key considerations for investors, according to Herald van der Linde, head of Asia equity strategy at HSBC.
Van der Linde also believes the artificial intelligence (AI)-led rally, which has largely benefited markets such as Hong Kong and Taiwan, is yet to fully play out in India.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
While "AI is one of the dominating trends in global markets," he said the optimism around the technology will eventually trickle down to Indian markets, even though its rollout in the country is likely to be slower.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
ALSO READ: TCS, Infosys, Coforge Rise 3% In Early Trade For Second Straight Session: What's Driving The Rally?
Against this backdrop, Indian equities traded higher on Wednesday. At around 10:30 am, the BSE Sensex was up 1.13% at 77,633, while the NSE Nifty 50 gained 1.03% to 24,231.70, led by buying in information technology shares ahead of the US Federal Reserve's policy decision.
On the global AI theme, van der Linde said Hong Kong and Taiwan have witnessed "overspending in AI," but added that investor enthusiasm for the sector is beginning to moderate.
"Suspect investors are moving away from the AI trend," he said, noting that price momentum in AI and chips is slowing down.
He, however, does not see crude oil posing a major risk to markets at current levels. "Crude is not concerning unless it crosses $100 a barrel," he said.
Despite his constructive view on capital flows, the HSBC strategist cautioned that Indian equities are still trading at elevated valuations.
"Indian market valuations are not low," he said, adding that investors continue to question India's earnings recovery, making corporate profit growth the key monitorable for the market in the coming quarters.
ALSO READ: Nifty Near 24,300, Sensex Up Over 1%: Three Reasons Why Market Is Rising
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
