Indian stock market leads Asia as "low AI exposure" safe-haven appeal rises

Indian stocks closed higher on Friday, with the benchmark index posting its best monthly performance since July as the local market became a safe haven amid the global technology selloff. The NSE Nifty 50 index rose 0.5%, while the small-cap index fell 2%. The Nifty gained 2% this month, ranking among the top performers among major Asian benchmarks. By contrast, regional benchmarks in markets dominated by the AI trade that were hit by the technology selloff fell about 6% over the same period. The Nifty's monthly outperformance versus emerging-market peers was the strongest since 2011, while Brazilian and South Korean stocks suffered sharp selloffs over the same period. India's lack of meaningful technology hardware and semiconductor stocks has shielded it to some extent from the global selloff. Meanwhile, overseas investors showed signs of a tentative return, net buying more than US$1.2 billion of Indian stocks this week through Wednesday. "The India 'anti-AI trade' is what October offered a glimpse of. But it is too early to start celebrating. The big worry is oil. Crude at around $117 a barrel is not good for India. Unless the geopolitical fundamentals improve, these market moves could be temporary," said Sudip Bandyopadhyay, chairman of Inditrade Capital. High oil prices weighed on market breadth. The Nifty Smallcap 250 index fell nearly 6% in October, its worst performance in seven months; the mid-cap index fell 3.4%. Thanks to the blockbuster listing of Jio Platforms Ltd. after India's largest-ever IPO, India became the world's largest IPO market in October. Market compilation data showed that Indian companies raised about INR455 billion (US$4.8 billion) through IPOs that month, exceeding the US$2.1 billion in the United States through Thursday and US$1.5 billion in Hong Kong. On Friday, fast-fashion retailer Trent Ltd. and airline IndiGo were among the top gainers in the Nifty 50 constituents. For the full month, Tata Consultancy Services Ltd. and Infosys Ltd. led gains. Still, the Nifty is down nearly 12% year to date, compared with a gain of more than 50% in Taiwan stocks and 36% in South Korea's Kospi index.