India's stock market draws inflows as global AI stocks slide

India's stock market is emerging as a hedge against a global sell-off in AI-related stocks, with the Nifty 50 gaining nearly 9% over the past month while major AI-heavy markets decline. Foreign investors, underweight on India for two years, could return, potentially driving inflows of around $115 billion. JPMorgan notes factors favoring India include falling oil prices, lower U.S. Treasury yields, and improved earnings growth of over 20%. Unlike Korea and Taiwan, Indian benchmarks focus on financials, consumption, and energy, not AI hardware. Foreign investors have turned net buyers, investing over $2.3 billion in the past four days. However, some analysts dispute India's role as an AI hedge, citing expensive valuations at 18.6 times forward price-to-earnings versus China's 9.3x. Bernstein argues India is neither an AI beneficiary nor anti-AI trade, while others note Nifty trades below its 10-year average forward P/E, with sustained earnings growth key to future inflows.