Indian stocks buck global tech rout, post best week in 6 years

Indian stocks reached their best weekly performance in six years as global tech markets struggled, according to recent data. The Nifty 50 and Sensex indices both closed at eight-month highs, with gains of 2.01% and 2.17%, respectively. This rally stands in contrast to the significant losses suffered by South Korea's Kospi, Japan's Nikkei, and Taiwan markets, which fell by 6%, 6%, and 4.5%, respectively.

The Nifty and Sensex outperformed this week, gaining 8.6% and 8.8%, respectively, marking their strongest performance since February 2021. Foreign investors, who had largely avoided Indian equities this year, made their biggest purchases in about six years, contributing to the rally. The influx of foreign capital was particularly strong on Thursday, with purchases reaching nearly 150 billion rupees ($1.6 billion) for the first time in over five years.

This buying trend appears to be linked to President Donald Trump's potential trade and geopolitical changes following US elections, which could lower the risk of further market disruption and contribute to more stable crude prices. Gains in Indian IT stocks were particularly notable, as they outperformed other sectors amid rising concerns over capital-intensive AI investments.

Analysts attribute the market's resilience to differentiated valuation between companies investing heavily in AI and those set to benefit from AI's enterprise adoption with lower capital requirements. Small and mid-cap stocks also contributed to the weekly gains, with financials leading the charge due to renewed foreign inflows and strong performances by HDFC Bank and ICICI Bank.