Will a pullback in $25 trillion global AI trade help Sensex shed its worst-performing tag?
The $25 trillion global AI trade has been the dazzling marquee act of financial markets, driving tech valuations to stratospheric heights—until recently. Now, with the Bloomberg AI Index slipping about 4% from its peak after a blistering 34% rise in three months, the AI party is showing signs of fatigue. While this pullback might spook some, it could ironically be the reset button Indian equities need to shake off their worst-performing tag. In a world obsessed with AI winners like the US and China, India’s market, less embedded in the AI boom and more weighted in traditional sectors, stands poised for a strategic relief rally if global risk appetites shift back to emerging markets.
Contextually, AI’s impact on global markets is massive and growing, with leading tech giants investing hundreds of billions and AI-related VC deals dominating transaction activity in 2025. However, India’s stock indices, such as the MSCI India Index, have lagged partly because India’s economy is currently underrepresented in the pure AI value chain compared to other major AI hubs. Analysts expect Indian corporate earnings to grow by 10% in FY26 and 17% in FY27, driven by sectors like financials, infrastructure, and consumption. If global investors cool on AI valuations, capital might rotate into markets like India, boosting the Sensex and helping it shed its laggard status in the global equity landscape.
