Indian stocks defy the global rout on Friday, with benchmark indices edging higher while markets across Asia fell sharply in the wake of a steep selloff in US technology shares. According to Reuters, continued foreign buying and the market’s lack of major exposure to artificial intelligence have insulated equities in Asia’s third-largest economy from the turmoil.
Benchmarks Edge Higher as Asia Falls
By 10:33 a.m. IST, the Nifty 50 had risen 0.51 per cent to 24,662.80, while the Sensex added 0.76 per cent to reach 79,917.60. The gains were modest, but they stood out against a very different picture elsewhere in the region. South Korea’s Kospi fell 8 per cent and Japan’s Nikkei dropped 5 per cent, both following Wall Street lower.
The contrast is notable given how the year has unfolded for India. The market has underperformed Asian and emerging market peers in 2026, as investors chased AI-related bets and a spike in oil prices raised concerns about demand and inflation in the South Asian economy.
What Triggered the Global Selloff
The pressure on global markets originated in the United States. Sentiment turned risk-averse overnight after a steep decline in technology stocks, with the Nasdaq sinking 5.5 per cent. The Dow Jones Industrial Average slid 3.4 per cent and the S&P 500 fell 4.4 per cent. Traders pointed to weak results from Qualcomm and concerns over slowing spending on AI infrastructure.
Because Indian markets carry little direct exposure to the AI trade, the damage was limited. Indian information technology companies, which tend to move inversely to AI-linked stocks, rallied instead. The Nifty IT index gained 1.3 per cent on Friday, taking its advance over the past two sessions to nearly 4 per cent.
Why Indian Stocks Defy the Global Rout
Behind the resilience lies a shift in the factors that had weighed on the market. Shahzad Madon, managing director and chief executive of TCG AMC, said higher energy prices, the AI trade, currency weakness and outflows by foreign investors until recently had been the main overhang on Indian equities. He added that this pressure is now easing, that the worst appears to be over from a macroeconomic standpoint, and that valuations have become more reasonable while earnings have held up.
The data supports that reading. On Thursday, foreign institutional investors bought stocks worth about 150 billion rupees, or $1.6 billion, their biggest single-day net purchase in nearly six years. The buying came as investors rotated out of AI-linked trades globally.
Oil has also been a significant factor. The Nifty 50 and Sensex rose 2.4 per cent and 2.6 per cent respectively on Thursday after Brent crude fell below $100 a barrel. Investors were betting that the Democratic sweep in the US midterm elections could hasten an end to the US-Iran conflict, a development that would ease pressure on energy prices.
A Rebound That Narrows the Year’s Gap
The recent run has begun to repair the damage done earlier in the year. Both benchmarks gained around 7 per cent in October, which reduced their year-to-date underperformance. Even so, the Nifty 50 and Sensex remain down 5.7 per cent and 6.2 per cent for 2026 so far. By comparison, MSCI Emerging Markets has risen 10 per cent and MSCI Asia ex-Japan 11.5 per cent over the same period.
That gap helps explain why some analysts see room for further gains. Krishna Bhimavarapu, APAC economist at State Street Investment Management, said India has a good chance and that markets are ripe for a rebound. He added that if global conditions remain supportive, India could become increasingly attractive to foreign investors.
Breadth Remains Uneven
Not every part of the market shared in Friday’s advance. Ten of the 16 major sectors recorded gains, with financial stocks, where foreign investors hold large stakes, among the beneficiaries. The Nifty Private Bank Index is up 4 per cent over the past two sessions. The broader market was weaker, however, with small-cap stocks down 1.4 per cent and mid-cap stocks down 0.8 per cent.
The split suggests that the rally is being led by large, widely held companies favoured by overseas funds, rather than by a broad-based surge in domestic risk appetite.
Outlook
Friday’s session shows how quickly relative positioning can change. A market that lagged its peers for most of the year is now benefiting from the very factors that held it back, namely lower oil prices, a pullback from AI-linked trades and the return of foreign money. Whether this holds will depend on the direction of crude, the path of the US technology selloff and the persistence of buying by foreign institutional investors. For now, the evidence is that Indian stocks defy the global rout, though the margin is slim and the underlying breadth uneven.
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