Software stocks in India are set to beat global chipmakers by record
The divergence suggests investors are growing weary of the AI-driven rally in chip stocks, while renewing interest in India's IT services firms after a years-long slump
 "Software stocks in India are set to beat global chipmakers by record")
India's software stocks are set for their biggest monthly outperformance over global chipmakers, signaling investors are moving out of the artificial intelligence trade and into beaten-down information technology names.
The NSE Nifty IT Index, a 10-member gauge of Indian software exporters, has jumped 16% this month, while MSCI Inc.'s measure of global semiconductor and allied equipment makers has slipped 13%.
The divergence suggests investors are growing weary of the AI-driven rally in chip stocks, while renewing interest in India's IT services firms after a years-long slump. The shift comes as South Korea's Kospi Index, a barometer for global semiconductor and AI plays, has plunged more than 30% from its mid-June peak. Jefferies Financial Group Inc last week raised India's IT sector to neutral, saying a reversal of the AI trade could drive tactical upside in the sector.
On Tuesday, shares of Infosys Ltd. and Tata Consultancy Services Ltd. lead gains across software firms in Asia, with gains of more than 3% each. Peers in China, Hong Kong and Australia also gained.