Overbought Nifty May Find Fresh Fuel as AI Stocks Tumble Globally

Overbought Nifty May Find Fresh Fuel as AI Stocks Tumble Globally Good morning... I’m Savio Shetty in Mumbai, where the stock market’s anti-AI status is proving to be a blessing. Global technology stocks have been hit by a renewed selloff amid growing concern that Democrats will seek tighter regulation of the AI industry after their strong showing in the US midterms. India, which largely missed out on the global AI rally because of its limited exposure to stocks tied to the technology, is now increasingly emerging as a beneficiary as the once-high-flying trade unravels. Up 6.4% over four sessions, the benchmark Nifty 50 is already on course for its best week since early 2021, and while technical indicators signal the gauge is overbought, there may be scope for the rally to continue, as we write below. The sharp recent slide in oil prices has also burnished the appeal of financial assets in the energy-importing economy, with bonds and the rupee also rising on Thursday. Global funds bought almost $2 billion of local stocks on a net basis in three sessions through Wednesday, with provisional exchange data showing another $1.6 billion of net purchases on Thursday. That’s a sharp turnaround after a record exodus took foreign ownership to historic lows. In key earnings, Hindalco will report its numbers today. Investors will get another chance to trade on Sunday during the exchanges’ annual Diwali session, from 2:20 p.m. to 3:30 p.m. local time. In today’s newsletter, we also write about: