Equities jumped over 1 per cent on Wednesday, avoiding the carnage in AI-linked markets across Asia as investors likely rotated out of crowded AI trades into other emerging markets such as India.
The Nifty 50 rose 1.1 per cent to 24250.2, while the BSE Sensex gained 1.16 per cent to 77654.6. This was the Nifty 50’s biggest daily percentage jump since June 12.
Elsewhere in Asia, South Korean stocks tumbled for a second straight session as the AI-driven rally unravelled, while Japan’s Nikkei fell to a two-month low. The losses were led by chipmakers after South Korea’s SK Hynix, which reported a six-fold jump in profit, failed to stem the panic as the results lagged lofty expectations.
The Kospi fell more than 8 per cent earlier in the day, but closed 6 per cent lower, at 5663.24. The benchmark only recently had topped 9000 before bouncing back down to its lowest level since early April.
SK Hynix sank 9.4 per cent while shares in Samsung Electronics dropped 4.8 per cent.
The sharp correction in chip stocks in South Korea presents an opportunity for India, as it can revive foreign investors’ interest in non-AI markets, said VK Vijayakumar, chief investment strategist at Geojit Investments.
Foreign investors have bought Indian shares worth over $1 billion so far this month, after four consecutive months of selling.
IT stocks, which bore the brunt of heavy sell-off due to fears of AI disruption, led the rally in India.
The Nifty IT index jumped 2.3 per cent, extending its four-session gains to 9.1 per cent.