As concerns about the artificial intelligence bubble grow, India is regaining the attention of global fund managers looking to diversify their equity investments in the coming year.

Aberdeen Group expects a rebound in the Indian stock market next year, while Invesco and East Asia Investment believe that the Indian market has a low correlation with AI trades and can serve as a tool to hedge against the risks of global equities—especially those heavily concentrated in technology stocks. Strategists at HSBC Holdings and Jefferies Financial Group expressed similar views.

Raj Singh, Multi-Asset Manager at Invesco, stated: "India could serve as a good diversification tool for portfolios in 2026, as it has a low correlation with other markets, and you will find that any pause in AI trading will lead to capital flowing into India." He pointed out that India is a strong domestic growth story, benefiting from tax cuts, labor law reforms, domestic liquidity, supportive policies, and stable corporate earnings.