Due to the decline in the US stock market, most of the stock markets of the world have been under pressure for the last few days. Despite this, the Indian stock market remains strong. Sensex and Nifty witnessed a rise for six consecutive days from November 10 to November 17 and during this period both the indices rose by more than 2%. At the same time, a continuous decline was seen in the American markets during the same period. Today, on Wednesday, November 19, the Indian stock markets closed with a gain of 0.61%, which indicates that this global fluctuation is having limited impact on the Indian stock market?
1. Why is the impact not visible on the Indian stock market?
Companies related to Artificial Intelligence (AI) have been the reason for the recent decline in stock markets around the world, including America. Shares of big companies related to Artificial Intelligence (AI) like Nvidia, Microsoft, Amazon, Alphabet and Meta have fallen heavily recently. Due to this the S&P 500 came under pressure.
But it did not have a big impact on the Indian market because high-valuation AI companies like Nvidia are not listed in India. The basis of business of most of the IT companies in India is not AI products but service-based exports. Due to this, the direct impact of the fall in AI shares was not visible on the Indian markets. This structural difference provides natural protection to the Indian market.
2. Foreign investors coming to India for diversification?
Some experts say that the trend related to AI stocks is weakening in the world and the Indian stock market can benefit from this. As AI stocks are falling in America, foreign investors can again increase buying in the Indian market. The performance of the Indian market is better than other countries like South Korea and Taiwan.
3. Fall in valuation
Nifty had fallen as much as 17% after hitting a record high of 26,277 on September 27 last year, making its valuations more attractive than many global markets. The MSCI India Index has gained only 6% this year, while the US and many emerging countries have given returns of 30–35%. This means that the risk of “speculative gains” in the Indian market is less, hence the possibility of a decline is also less.
For this reason, the interest of foreign investors is gradually returning. Strong banking system, stable policies and better earnings visibility in India have increased the confidence of large investors.
4. SIP and domestic investors become the biggest strength of the Indian market
The biggest reason for the resilience of the Indian market at this time is the strong participation of domestic investors. Investments coming into Bajra through SIP are at historic levels and retail investors are buying at every dip. This is the reason why even FPI selling is not able to bring down the market much.
In 2025, most of the foreign investors were investing in AI stocks of America, due to which money was flowing out of India. But domestic institutional investors and retail investors completely handled this pressure by making heavy purchases. Along with this, strong demand in categories like auto and consumer durables, strength of festive season and expectations of GST cut gave further support to the market.
Overall, when the world is worried about AI bubble and the US stock markets are under pressure, the Indian stock market is showing strength on the basis of domestic demand, strong retail investment, attractive valuations and stable economic base.
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