Foreign selling in Indian equities may stretch into next year as Asia’s artificial-intelligence winners offer stronger earnings prospects at cheaper valuations, according to BofA Global Research.
“India is facing earnings downgrades, while other AI-driven markets are seeing upgrades,” India research head Amish Shah said. Global investors are unlikely to return to India “before 2027 or perhaps even 2028. It definitely does not look like a 2026 event.”
Local stocks are among the worst performers globally so far in 2026, with a weakening rupee worsening a record $23 billion foreign selloff as global investors continue to chase AI-linked plays elsewhere in Asia. Without a meaningful expansion in earnings growth, India’s premium valuations may remain under pressure.
