MUMBAI: After losing out big on the global artificial intelligence (AI) rally, Indian equities are regaining the attention of investors seeking to weather the latest market turbulence.

With the AI frenzy roiling benchmark gauges from Asia to the United States, the NSE Nifty 50 Index is becoming a safe haven of sorts for global investors.

In the first half of the year, it moved 1% or more on just about one-third of the days – less than the MSCI Emerging Markets Index and barely more than the S&P 500 Index. 

India’s lack of AI plays has been a hurdle most of the year as investors turned to markets like South Korea and Taiwan that delivered stellar returns.

But with concerns mounting over the sustainability of that trade, interest in India is slowly coming back.

In June, the Nifty 50 outperformed the MSCI Emerging Markets Index by the most since November, while foreign outflows were the smallest in four months.

“India’s calm comes down to one thing: It sits outside the AI trade,” said Maxence Visseau, chief investment officer of Arkevium Capital in Dubai.

His firm is neutral on the market and uses it as a diversifier. “India works as an AI hedge inside the EM complex.” 

Indian equities remain some of the world’s worst performers this year, but the tide is starting to turn as the rupee stabilises after hitting a record low and oil gains that tanked shares of refiners and airlines recede on easing tensions in the Middle East.

That’s reduced inflation concerns and brightened prospects for India’s economic growth, according to a government report at the end of June. 

At the same time, market players are getting more upbeat about the upcoming earnings season, which Tata Consultancy Services Ltd kicks off on Thursday.

“The fall in commodity prices has altered the macro outlook for India almost overnight,” said Sandip Sabharwal, founder of research house Asksandipsabharwal.com.

“Lower commodity prices, improving capital flows and stable interest rates create an environment where earnings upgrades are likely to exceed downgrades over the coming quarters.”

In a note to clients, Morgan Stanley analysts, including Ridham Desai, wrote last month that India has become a “much larger macro asset class”.

“The less volatile inflation data in recent years support equity valuations and turn the market into one of defensive growth that can withstand global shocks better than it used to,” they said.

Over the past decade, the Nifty 50 almost tripled, delivering annual gains of more than 10% on six separate years.

The benchmark index logged 38 sessions with moves of 1% or more in either direction in the first six months of 2026, compared with 59 for MSCI’s emerging-market and Asian gauges and 32 for the S&P 500. — Bloomberg