New Delhi, November 9 (IANS). Global investment firm Jefferies has increased allocation to India in its 'Asia-Pacific (X:Japan) Relative-Return Portfolio' amid fall in AI stocks. Additionally, allocations to South Korea and Taiwan have been cut.
The proposed allocation to India has been raised by 2 percentage points to 14 per cent, reported Christopher Wood, global head of equity strategy at Jefferies. At present, India's weightage in the MSCI benchmark is 12 percent.
On the other hand, Jefferies has cut its estimates for South Korea and Taiwan by 1 percentage point each, bringing them to 18 percent and 24 percent, respectively. In this way both the markets have come in the 'underweight' category.
Due to this change, India's 'overweight' status has increased by 2 percentage points, while Korea remains 'underweight' by 1 percentage point and Taiwan remains 'underweight' by 2.8 percentage points. Both of these markets are deeply interconnected with memory chips, foundries and semiconductor equipment.
Jefferies' current stance reverses the stance it took at the start of 2026, when AI hardware stocks rallied, leading to an increase in allocations to Korea and Taiwan.
India is now primarily seen not as a country with high investment in domestic development, but as one relatively less affected by a potential slowdown in AI-related capital spending.
While India is not immune to the broader selloff in emerging markets, its hyperscaler spending and less direct involvement in semiconductor hardware has made it attractive.
Wood said financial markets are more cautious in funding the next phase of AI investment, even though capital spending plans remain at a high level.
According to Jefferies, capital spending by Microsoft, Amazon, Alphabet and Meta is expected to be around $1.04 trillion in 2027. At the same time, credit spreads and credit default swap spreads have increased for many of these companies, which are signs of stress.
After reaching their all-time high in late June, memory stocks have fallen 40 percent. In addition, the 'China AI Semiconductor Top 10 Index' has also halved from its mid-year high.
According to another report, India's benchmark index 'Nifty 50' may reach 28,000 points by the end of 2027. Behind this are factors like strong earnings outlook, low oil prices and the possibility of slowing down of capital expenditure related to Artificial Intelligence globally.
–IANS
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