Jefferies' Chris Wood sees fresh US-Iran tensions as biggest risk to India, sees this sector as the best hedge
In his latest GREED & Fear report, Chris Wood said that the AI thematic investment standpoint has peaked, leading to a growing desire to look at non-artificial intelligence trades on the part of portfolio managers. But in emerging markets, the obvious market to benefit from the reverse AI trade has been India, most particularly with the recent disappointing election result in Brazil, he said.
Christopher Wood, Global Head of Equity Strategy at Jefferies, remains bullish on the Indian stock market despite renewed hostilities in the Middle East posing the biggest risk to India from both relative and absolute return standpoints. In his latest GREED & Fear report, Wood noted that the AI thematic investment standpoint has peaked, leading to a growing desire among portfolio managers to explore non-artificial intelligence trades.
However, the emerging market that is poised to benefit from the reverse AI trade is India, particularly following Brazil's disappointing election results. This has led to foreign investors turning net buyers of Indian equities in the past three weeks, following a massive selloff at the beginning of 2025. Wood also highlighted India's attractive valuations relative to history, better than expected cyclical recovery in the economy, and the emergence of a long-anticipated private-sector capex cycle, which has been supported by a doubling of imports of machinery goods from $29 billion in FY21 to $62 billion in FY26.
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