Business · Markets · 15 hrs ago
Investors turn to China and India as AI trade weakens
Investors are moving beyond AI-focused stocks after the AI trade weakened following the US midterm elections.
Asian markets have been hit hard because major companies such as Samsung, SK Hynix and TSMC supply the global AI build-out.
Some investors see China as a way to diversify portfolios, and a Hong Kong index tracking mainland companies rose 5.2% last week.
India’s Nifty 50 rose 8.6% last week, its strongest weekly gain since 2021, as overseas investors returned.
India’s lower exposure to AI is now seen as an advantage, while falling oil prices ease pressure on the country, which imports energy.
Investors are also looking at Asian healthcare and consumer companies, and one market manager expects more money to flow into Indian shares.
The weakening of the AI trade after the US midterm elections is prompting investors to reconsider their Asia portfolios.
Investors are showing renewed interest in Chinese and Indian stocks, which have been out of favor.
India’s Nifty 50 rose 8.6% last week, its best weekly performance since 2021.
A Hong Kong gauge tracking mainland Chinese companies gained 5.2% last week, its strongest performance since March 2025.
Investors are also considering Asian healthcare and consumer companies as alternatives to AI-linked stocks.
- Who
- Global investors and asset managers, including Aberdeen Investments, Lotus Asset Management and Allianz Global Investors.
- What
- Investors are shifting attention from AI-linked stocks toward Chinese and Indian equities and other Asian sectors.
- When
- After the US midterm elections; the article reports market gains last week.
- Where
- Asian markets, particularly China, India and Hong Kong.
- Why
- Investors are reassessing the AI trade amid concerns about industry scrutiny and whether heavy computing infrastructure spending will generate sufficient returns.
This story does not have two clearly opposing sides.
Charlie Hong sold shares in SK Hynix, Samsung Electronics, Intel and Lumentum Holdings and increased his Indian holdings.
The Nifty 50 gained 8.6%, while a Hong Kong gauge tracking mainland companies rose 5.2%.
Utkarsh Singh began taking calls from clients in Singapore as Indian stocks rallied.
- Nifty 50
- Gained 8.6% last week, its best week since 2021
- Hong Kong mainland-company gauge
- Gained 5.2% last week, its best performance since March 2025
- Foreign investment in Indian shares
- Net $1.9 billion through Wednesday last week
- Investor
- Charlie Hong increased holdings in Indian new-age technology, financial and contract drug-manufacturing companies
What people are saying
I expect investors to diversify more broadly and reduce their concentration in the AI trade
This should be supportive of China and other markets where valuations are less demanding.
I am betting against oil and petrochemical firms and going long precious metals and Hong Kong equity futures.
Foreign investors are suddenly pouring in