New Delhi, June 24 -- AI stocks have seen some selling lately, sparking speculation that investors are playing an anti-AI trade amid concerns that the sector is in bubble territory.

India's limited participation in the global AI rally has been a key factor behind FPI selling and the underperformance of the Indian stock market over the past year.

The weight of semiconductor-heavy markets has increased significantly in the MSCI EM index, while that of India has decreased.

As Devarsh Vakil, Head of Prime Research at HDFC Securities, pointed out, India's weighting in the MSCI EM index dropped significantly from its peak of 20 on 31 July 2024 to 11.9 on 30 April 2026. This represents an absolute decrease of 8.1 points, which equates to a 40...