Since the beginning of this year, foreign capital has continued to withdraw from the Indian stock market, and global funds are pouring into artificial intelligence-related companies. Taiwan and South Korea stock markets have attracted huge amounts of money. (Bloomberg)
[Financial Channel/Comprehensive Report] India, which used to be regarded as one of the most attractive emerging markets in the world, is now facing the dual pressure of capital withdrawal and slowing growth, and has been overtaken by Taiwan and South Korea within a week. "Bloomberg" reported that due to the lack of local artificial intelligence leading companies, the Indian market missed out on the world's hottest investment theme. With the rapid development of AI trends and technology, investor anxiety was once again revealed, and Indian IT services stocks plummeted on Wednesday.
According to reports, the Indian IT stock index was originally inspired by NVIDIA CEO Jensen Huang's downplaying that AI will subvert the IT service industry. It rose by more than 4% on the 2nd. However, the optimism only lasted for one day. Investors quickly refocused on the possible long-term impact of AI, causing related stocks to plummet across the board.
Data show that India's Nifty IT index fell 5.8% intraday on June 3 to 29,310 points, marking its worst single-day performance since February this year and the largest decline in the past four months. Among them, Tata Consultancy Services (TCS), the largest software exporter, became the hardest hit, and its stock price plummeted 9%, leading the decline in the entire industry. Bengaluru software giants Infosys and Wipro also fell 4.3% and 3.7% respectively.
Mid-sized software services companies were not immune, with Coforge and Persistent Systems both falling 5.7%. Analysts pointed out that this wave of selling pressure has also wiped out the market's optimism in the previous two trading days, and the market is still far from believing that the industry has bottomed out. As of 2:20 pm Taipei time on the 4th, India's Nifty IT index was at 29,345 points, down 38.85 points.
Data shows that India's Nifty IT index has fallen by 26% in 2025, and has fallen by another 22% since 2026. It has been weak for two consecutive years, reflecting that the market's doubts about the industry's prospects continue to rise.
Over the past 20 years, India has become an important base for global enterprise software development, system maintenance and technical support by virtue of its huge engineer talent pool and cost advantages. Its IT industry scale reaches approximately US$300 billion (approximately NT$9.4 trillion). However, the rise of generative AI is beginning to challenge this business model. Analysts said that the Indian market has underestimated the deflationary effect on service prices that may be caused by AI's improvement in production efficiency. It is estimated that the total serviceable market (TAM) of local Indian IT companies may shrink by 20% to 25% in the future.
"CNBC" reported that the total market capitalization of Taiwan's stock market exceeded US$5 trillion (approximately NT$157 trillion) on May 26, surpassing India to become the fifth largest stock market in the world. Less than a week later, the South Korean stock market also further overtook India, pushing India to the seventh largest stock market in the world.
At the same time, foreign investment is continuing to withdraw from the Indian market. Data from NSDL, an Indian securities depository, show that since January this year, foreign investors have sold more than US$27.6 billion (approximately NT$869.28 billion) of Indian stocks, much higher than the US$18.9 billion (approximately NT$595.27 billion) oversold in 2025.
Analysts point out that global funds are pouring into artificial intelligence-related companies. Driven by the AI craze, the market values of technology giants such as TSMC, Samsung Electronics and SK Hynix have exceeded the trillion-dollar mark, which has also led to sharp rises in the stock markets of Taiwan and South Korea.
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