Indian equities lag peers as AI boom lifts Korea, Taiwan markets

India's flagship Nifty 50 index has lagged behind most major global peers over the past 12 months, with the index finishing second-last among 18 major markets tracked by analysts. The underperformance underscores a divergence in investor sentiment between Indian equities and technology-heavy markets elsewhere, particularly in East Asia.

Markets in Korea and Taiwan have surged on the back of strong gains in artificial intelligence-related stocks, with semiconductor and technology companies driving regional indices higher. This AI-led rally has benefited markets with significant exposure to chip manufacturing and technology hardware, sectors where Korean and Taiwanese companies hold dominant global positions.

India's Nifty 50, which is heavily weighted towards financial services, consumer stocks, and energy companies, has not captured the same momentum from the global AI boom. While technology stocks form a component of the Indian index, the concentration of AI-related companies remains relatively lower compared to regional peers.

Among the 18 major markets tracked, only Indonesia's equity index has underperformed India's Nifty 50 over the review period. The relative underperformance has prompted market participants to reassess allocation strategies and the growth narrative around Indian equities, even as the country's economic fundamentals remain relatively stable.