How AI collapse could benefit Indian equity market; Jefferies' Christopher Wood explains 

The collapse of Artificial Intelligence (AI) story is likely to lead to an outperformance in the equity market, said Christopher Wood, head of equity strategy, Jefferies. In an exclusive interview to BTTV, Wood said investors have been exiting India since early 2023 when the world witnessed the start of AI revolution.

Foreign investors exited Indian market since they had to raise allocations to semiconductor companies in Taiwan and particularly Korea, according to Wood.

"The reason all the foreigners sold Indian stocks last year has absolutely nothing to do, 95% has nothing to do with India. They had to raise, increase allocations in semiconductor companies in Taiwan, and most particularly Korea," Woods told BTTV

"Right now what's 100% clear is most of the value in the AI trade has been captured by the semiconductor companies," said Woods.

On asked about his stance on the Indian market, Woods said he was marginally overweight on India.

Impact of AI on Indian market  

Commenting on the impact of AI on the Indian market, Woods said that a few years ago, India was the best structural growth story in global equities. In fact, it was a 'hot story'.

"But ever since this AI theme kicked into the markets, which was in early 2023, it's been diluted because of the focus on AI and that focus has incrementally ratcheted up," Woods told BTTV.

For India, he identifies higher oil prices as the key market risk, while energy emerges as a major investment theme. Woods also remains bullish on gold and sees signs that the Indian rupee could be bottoming.

On the resilience of US markets, Woods said people selling semiconductor stocks such as Samsung Electronics or NVIDIA are booking the profits upfront. This is proving beneficial for earnings growth.