J.P. Morgan: India is becoming investors’ default non-AI bet (opens the source in a new tab)
- J.P. Morgan’s Rajiv Batra argues India is increasingly the default pick for investors who want emerging-market exposure without the AI trade. India is about 12% of the MSCI EM index, against about 25% for China.
- Foreign investors bought about $2.5bn in July and $3bn in August, yet own just 17.6% of large caps, a decade-plus low. Domestic institutions have been net buyers for 37 straight months.
- The bank expects FY27 earnings growth of about 10.4–11% and GDP growth of 6.5–7%. The risks it flags: oil well above $90, rising global yields and a stronger El Niño. Published 15 September.
- 17.6%
- foreign ownership of large caps
- $115bn
- possible inflows if underweights close
- 37
- straight months of local buying
Why it matters Crowding in AI stocks is India’s opening: a market without AI giants becomes a diversifier. Foreign owners are light, so there is room to buy, and today’s Yes Bank ruling and Fairfax’s IDBI bet add to the case for confidence.
Other side Being the non-AI market cuts both ways. If AI stocks keep running, India lags, and a sustained oil spike would test the story fast.
Source:J.P. Morgan (free to read) ↗