- Indian stocks extended November gains despite Wall Street's decline on US inflation data
- Sensex rose over 1,300 points; Nifty 50 hit an eight-month high of 25,424.35 before easing
- Nifty gained 9% in November; US Nasdaq faced four weekly declines amid AI sell-off concerns
Indian stocks extended their November rally on Wednesday, hours after Wall Street closed lower on hot US inflation data. Back from the Diwali break, the Sensex jumped over 1,300 points in early trade and the Nifty 50 touched 25,424.35, its highest level in about eight months, before both pared gains in the afternoon.
The two markets have been heading in opposite directions all month. The Nifty is up about 9% in November so far, and last week's 8.58% jump was its biggest weekly gain since February 2021. In the US, the Nasdaq Composite has posted four straight weekly declines, and Nvidia closed on Tuesday at $168.89, nearly 30% below its October record.
For Indians who bought US technology stocks this year, that raises an awkward question: was going abroad a mistake?
Not according to Subho Moulik, founder and chief executive of Appreciate, a platform that lets Indian investors buy US stocks. In an emailed interaction with NDTV Profit, Moulik argued that India's rally strengthens, rather than weakens, the case for owning US stocks. "Indian markets cushioned the week; US markets cushioned the year," he said.
The Year Still Belongs To Wall Street
The numbers back him up. Even after Tuesday's losses, the S&P 500 is up about 9.9% in 2026. The Nifty, despite this month's surge, is still down about 4% for the year.
"India and US equities have a long-run correlation of about 0.4, which is the point of diversification," Moulik said.
Foreign money explains much of India's catch-up this month. Foreign portfolio investors put Rs 53,739 crore into Indian equities between Nov. 2 and Nov. 9, reversing two straight months of outflows, as the global AI sell-off pushed them towards markets with little exposure to the trade.
ALSO READ: Nvidia's $470 Billion Sell-Off: Indian Mutual Funds That Have Exposure To The Chipmaker
Wall Street's latest setback came on Tuesday. October consumer prices rose more than expected, with core inflation up 0.3% for a third straight month, firming up bets on a Federal Reserve rate hike in December. The S&P 500 slipped 0.38% to 7,520.93 and the Nasdaq Composite fell 0.74% to 25,065.88.
Nvidia dropped more than 5%, weighed down by a board investigation and a threatened congressional subpoena of chief executive Jensen Huang, while the 10-year Treasury yield rose to nearly 5%.
Was The AI Trade Already Fragile?
The sharpest blow came last Thursday, when the S&P 500 fell 4.4%, its worst day since April 2025, as Democrats' sweeping gains in the US midterm elections hit chip and data-centre stocks. Moulik sees the vote as the spark, not the cause.
"The election was the trigger, but the fragility was already there," he said.
His concern is the pace of spending. "AI demand is real but spending is out of sync; parts of the build-out are being funded ahead of the cash they generate."
He pointed to Alphabet, which spent $51.36 billion on capital expenditure in the September quarter against $42.29 billion of operating cash flow, leaving free cash flow at negative $9.07 billion. "A build-out that spends faster than it earns is more sensitive to any shock," he said.
Even so, he does not see this as the start of a broad bear market. "This is a correction concentrated in the AI chain, not proof of a new bear market," Moulik said. He noted that the SOX chip index had fallen 38.4% from its June 22 record by last Thursday's close, while the broader S&P 500 traded at 17.7 times forward earnings, below its 10-year average of 19.1.
The risk, he said, is limited to AI-linked companies that depend on outside money to keep building. "The correction becomes something bigger only if lenders and shareholders stop funding the gap."
What Investors Should Do Now
For Indians sitting on losses in US tech, Moulik's advice is to check allocation before reacting. "Position size, not the week's move, should decide what a first-time investor does," he said.
A 35-40% share in US and global assets can suit a serious long-term investor, according to him. A position within that limit can be held, while one that has grown beyond it is due for rebalancing.
ALSO READ: Is Wall Street Underpricing AI Now? Tech Stocks Look Cheap For First Time In 9 Years
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