J.P. Morgan says $115 billion could flow into India's stock market as global investors seek to hedge their crowded AI exposure. The investment bank argues India, which makes up about 12% of the MSCI Emerging Markets Index, is emerging as a safe haven for those looking to diversify away from AI earnings power, citing fiscal and monetary policy aligned with steady economic growth. Rajiv Batra, head of Asia and co-head of Global Emerging Markets Equity Strategy at J.P. Morgan, said that when investors go looking for non-AI exposure, India increasingly becomes the default choice. J.P. Morgan noted that small- and mid-cap Indian companies led the expansion with earnings growth of at least 25% for six to seven consecutive quarters, followed by double-digit earnings growth at large-caps over two quarters, and that foreign investors are starting to buy shares in e-commerce, hotel, mining and healthcare sectors. The bank flagged oil as the biggest risk, saying Brent crude above $85 per barrel would begin to drag down economic growth, and it is also tracking global interest rates and El Niño for possible monsoon disruption and renewed inflation. India's economy expanded by 7.8% in the April to June quarter.
JPMorgan Chase & CoJ.P. Morgan is the source of the bullish India call, but the article reports no company-specific financial event for JPMorgan itself.
