Global AI fervour reshuffles equity markets as India’s IT sector outshines broader economy

A wave of artificial intelligence–fuelled optimism swept across global equity markets this week, propelling India’s technology shares to their sharpest rally in over a year even as the country’s broader benchmark buckled under foreign selling. The Nifty IT index surged 4.2 per cent on Tuesday — its best single-day gain since May 2025 — led by heavyweights Tata Consultancy Services and Infosys, which climbed 6.7 per cent and more than 4 per cent respectively. The three-session advance of 7.6 per cent stood in stark contrast to the Nifty 50’s 1.8 per cent decline over the same period, underscoring the schism between an AI-adjacent services sector and an economy grappling with geopolitical uncertainty in West Asia.\n\nIn the semiconductor heartlands of East Asia, the AI bonanza has redrawn the market-capitalisation league tables. South Korean equities have soared 88 per cent in 2026, while Taiwan’s market expanded by 58 per cent, both overtaking India, which has shrunk more than 8 per cent this calendar year amid a $24bn foreign sell-off. The divergence reflects a structural reconfiguration that Nvidia’s regional leadership describes as a move from speculative promise to industrial reality. “We have seen exponential growth,” an executive told El Cronista, noting that the next-generation Vera Rubin architecture will begin shipping in the third quarter. The idea of ‘AI factories’ — vast computing plants treated as a utility — is fast becoming the organising principle of the new digital economy.\n\nEurope, too, has felt the updraft. Milan’s FTSE Mib closed at a fresh record of 50,578 points, up 1.6 per cent, with STMicroelectronics rocketing 15 per cent after it raised revenue guidance for data-centre chips. The rally was broad, supported by easing tensions between the US and Iran and a narrowing Italian-German bond spread, but the catalyst was unmistakably AI. Analysts in Milan noted that the appetite for compute infrastructure is so voracious that even component suppliers are benefiting from the halo effect created by hyperscale capital expenditure plans.\n\nViewed together, these snapshots confirm that the AI investment cycle is no longer a niche theme but a force reshaping national market trajectories. Indian IT services firms, once seen as vulnerable to automation, are now being repriced as facilitators of enterprise AI adoption. “Improved global software sentiment and growing evidence that enterprise AI adoption is expanding technology spending opportunities” are underpinning the rally, said Kunal Bajaj of Choice Institutional Equities. Yet the capital flows also betray a harsh mercantilism: money is chasing the hard infrastructure of chips and servers in Asia and the software implementation skills in India, while bypassing economies perceived as less directly exposed. As Nvidia’s Vera Rubin prepares to enter the market, the conviction that AI is a durable, multi-year buildout — not a speculative peak — will be tested by the pace at which physical computing capacity can be deployed.