ICICI Pru's S Naren warns of a risk that no market, including India, can escape
Naren compared the current environment to the dot-com bubble. “The risk is not AI itself, it’s AI stocks doing badly,” he noted. “From 1999 to 2002, internet stocks crashed. The internet did not.”
- Nov 9, 2025,
- Updated Nov 9, 2025 9:15 AM IST
A sharp correction in US markets could spark a global rout and India will not be spared. That is the stark warning from S Naren, Chief Investment Officer at ICICI Prudential AMC, who says the entire global market is hanging by a thread, with inflated AI stocks posing the biggest threat.
Speaking at CNBC-TV18’s Global Leadership Summit, Naren said Indian equities may outperform on a relative scale but remain highly vulnerable to shocks from abroad. “The major risk now is something going wrong in the US, especially with AI stocks,” he said. “Since the US makes up nearly 60 percent of the global index, it is unrealistic to expect India to rise if the US declines.”
Naren compared the current environment to the dot-com bubble. “The risk is not AI itself, it’s AI stocks doing badly,” he noted. “From 1999 to 2002, internet stocks crashed. The internet did not.”
He warned that a 20 percent fall in US markets could drag down every major economy. “Even in 1999 to 2001, Indian markets fell despite a strong economy. If the US goes down hard, everything else follows,” Naren said.
While India has recently lagged behind global peers, Naren sees that as a relative advantage now. “On a relative basis, it gets much better from here because India has underperformed every other market,” he said. But he was clear about the risks. “Every market in the world is very costly today. The absolute outlook is uncertain.”
Back home, Naren pointed to the rising burden on domestic investors. “Earlier, FI money used to be double the local money. Today, we have very low FI money. The entire burden of matching promoter and PE selling is on domestic investors.”
He credited SIP flows for holding markets steady but warned they are not enough. “If supply drops and SIPs stay steady for just three months, we could see a rally. But for real growth, foreign money must come back.”
Looking ahead, Naren said India’s next breakout hinges on foreign inflows. “There’s a good chance FIIs will turn net buyers in the next 12 months, and that’s when we could hit 3 percent of GDP in equity flows.”
A sharp correction in US markets could spark a global rout and India will not be spared. That is the stark warning from S Naren, Chief Investment Officer at ICICI Prudential AMC, who says the entire global market is hanging by a thread, with inflated AI stocks posing the biggest threat.
Speaking at CNBC-TV18’s Global Leadership Summit, Naren said Indian equities may outperform on a relative scale but remain highly vulnerable to shocks from abroad. “The major risk now is something going wrong in the US, especially with AI stocks,” he said. “Since the US makes up nearly 60 percent of the global index, it is unrealistic to expect India to rise if the US declines.”
Naren compared the current environment to the dot-com bubble. “The risk is not AI itself, it’s AI stocks doing badly,” he noted. “From 1999 to 2002, internet stocks crashed. The internet did not.”
He warned that a 20 percent fall in US markets could drag down every major economy. “Even in 1999 to 2001, Indian markets fell despite a strong economy. If the US goes down hard, everything else follows,” Naren said.
While India has recently lagged behind global peers, Naren sees that as a relative advantage now. “On a relative basis, it gets much better from here because India has underperformed every other market,” he said. But he was clear about the risks. “Every market in the world is very costly today. The absolute outlook is uncertain.”
Back home, Naren pointed to the rising burden on domestic investors. “Earlier, FI money used to be double the local money. Today, we have very low FI money. The entire burden of matching promoter and PE selling is on domestic investors.”
He credited SIP flows for holding markets steady but warned they are not enough. “If supply drops and SIPs stay steady for just three months, we could see a rally. But for real growth, foreign money must come back.”
Looking ahead, Naren said India’s next breakout hinges on foreign inflows. “There’s a good chance FIIs will turn net buyers in the next 12 months, and that’s when we could hit 3 percent of GDP in equity flows.”