New Delhi, June 30 -- A sharp correction in global equity markets could spill over into Indian markets, particularly if driven by a reassessment of corporate earnings growth and elevated valuations in artificial intelligence (AI)-related stocks, the Reserve Bank of India (RBI) warned.

"The global economy and the financial system are being reshaped by two profound forces-growing geopolitical fragmentation and technological disruption brought about by rapid advances in AI," RBI governor Sanjay Malhotra said in his foreword to the central bank's half-yearly Financial Stability Report (FSR) released on Tuesday.

Inflationary pressures may require central banks of major advanced economies to remain hawkish, potentially tightening global finan...