Nifty 50: Global Sell-Off Turns India’s Rally Into 8.6% Weekly Gain
Foreign portfolio investors bought ₹45,970 crore of Indian equities in five trading sessions, ending two months of net selling. The Nifty 50 posted its strongest weekly gain since February 2021 and the rupee strengthened, as a retreat from AI-linked stocks and cheaper oil drew funds to India.
The global sell-off turns India's lack of AI exposure into an advantage: foreign portfolio investors (FPIs) put ₹45,970 crore into Indian equities in five trading sessions in November, lifting the Nifty 50 by 8.6% for the week.
It was the index's strongest weekly performance since February 2021. The buying also ended two consecutive months in which foreign investors were net sellers of Indian stocks.
Rupee and index recover
The rally trimmed the Nifty 50's year-to-date loss to 4.21%. At its lowest point this year the index had fallen nearly 15%. It has since recovered close to 13% from that low.
The rupee, which hit multiple record lows this year, climbed 0.6% to 93.91 against the US dollar. That is its strongest level since April.
Why money moved to India
A correction in global AI-linked stocks drove much of the shift. Concerns that the US Congress, led by Democrats, might restrict the rapid expansion of data centers in the US triggered a sell-off in chip and memory stocks across Asia.
India has little exposure to the AI trade, which had left its stocks among Asia's worst performers. As that trade unwinds, the weakness has quickly become a strength.
Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, pointed to three factors. The first was oil. He said the US midterm results were read as raising the odds of de-escalation in the US–Iran conflict, and Brent crude fell about 13% to roughly $98, its steepest weekly drop since the start of Covid.
Cheaper oil eases pressure on India's inflation, current account and rupee, Gaur said, because the country depends heavily on oil imports. The rupee strengthened to about 93.90 per dollar from around 95.4 a week earlier.
The second was the AI rout. A tech sell-off on Thursday took the Nasdaq down 5.5% and the S&P 500 down 4.4%, after weak Qualcomm results and worries about slowing AI infrastructure spending. Korea and Japan fell about 6% on Friday.
Global funds have been rotating out of AI-linked names into markets such as India, Gaur said. Indian IT stocks even rose. The third factor was value: India looked cheap after a poor year, while earnings held up.
What could move flows next
Gaur said US Consumer Price Index (CPI) inflation data due on Tuesday, November 10, will be closely watched. A December interest-rate hike is nearly priced in, so a hotter-than-expected reading could push bond yields and the US dollar higher.
He also named crude oil and developments in the Gulf region as key variables. The question is whether Brent stays below $100 a barrel or the de-escalation narrative loses momentum.
Federal Reserve commentary and US bond yields will also be monitored after the latest jobs report. Hawkish messaging on a December hike could influence global fund flows, Gaur said.
