Global AI selloff lifts Indian markets; Nifty sees best day in over 6 weeks

Correction in South Korean tech stocks led to Kospi falling for a 2nd straight session

Indian equities gained as foreign investors shifted money into them, which are insulated from the broader sell-off in artificial intelligence (AI) stocks in other emerging markets. 

The benchmark Sensex on Wednesday ended the session at 77,655, a gain of 889 points or 1.2 per cent. The Nifty, meanwhile, ended the session at 24,250, up 265 points or 1.1 per cent. For Nifty, Wednesday’s gains were the best since June 12, 2026, and for Sensex, the best gains since July 17, 2026. 

The total market capitalisation of BSE-listed firms rose by ₹4.2 trillion to ₹483 trillion. 

Market analysts said the correction in technology stocks across emerging markets, such as South Korea, may have encouraged global investors to explore relatively less AI-dependent markets, such as India. 

 

Foreign Portfolio Investors (FPIs) were net buyers of Indian equities worth ₹2,982 crore, their biggest one-day buying since June 19, and domestic institutions were net buyers worth ₹998 crore. FPIs have been net buyers in July, worth ₹9,613 crore after four months of selling. 

South Korea’s Kospi index declined for the second consecutive session. In the last two sessions, the South Korean benchmark had declined 16.2 per cent amid concerns about stretched valuations in AI-related stocks. 

Information technology stocks led the domestic rally. The Nifty IT index rose 2.3 per cent. In the last four sessions, the Nifty IT index has gained 9.1 per cent. Jefferies last week upgraded the sector from underweight to neutral. It said the reversal of the AI trade could drive tactical upside in the sector, particularly after this year's large decline. 

Four-fifths of Sensex stocks gained. HDFC Bank, which rose 1.7 per cent, was the biggest contributor to Sensex gains. Contributions to index gains depend on a constituent's weight and its movement. Infosys, which rose 4.5 per cent, was the second biggest contributor. 

“Indian equities are expected to remain range-bound with a positive bias, supported by positive global cues and healthy domestic corporate earnings. Sentiment improved as investor flows returned to the Indian IT sector following the sharp correction in global AI and semiconductor stocks. Markets also looked past recent geopolitical tensions and crude oil volatility, with focus shifting back to domestic earnings and macroeconomic triggers,” said Siddhartha Khemka, head of research for wealth management of Motilal Oswal Financial Services. 

Market breadth was strong with 2,533 stocks advancing and 1,705 declining.