New Delhi, May 9 -- India remains a critical destination for emerging market investors, even as it faces a "reverse AI trade" that has impacted its MSCI Emerging Markets Index weightage to 12 per cent, according to a Jefferies Greed & Fear report.

"If India has been out of favour as the reverse AI trade, at least it has not been reduced to complete benchmark irrelevance for emerging market investors, which is the real risk now facing Asean markets," the report stated.

The report highlighted that Indian mid-cap stocks have seen a good rally, outperforming the broader market despite a period of significant foreign capital outflows.

"Meanwhile, amidst the focus on DRAM stocks it would be easy to miss that this quarter has seen a decent ra...