JPMorgan On Indian Markets | Rate Hikes, Rupee, Midcaps & AI Risks Explained | Indianomics

India’s robust macroeconomic performance, highlighted by 7.8% GDP growth, currently faces a disconnect with stagnant equity markets pressured by rising global bond yields and elevated oil prices. JPMorgan’s research team attributes this market somberness to relative positioning, as global capital remains heavily concentrated in the capital-intensive AI trade. While the Indian economy demonstrates resilience, the coming months present a hostile global environment characterized by coordinated rate hikes from developed market central banks. The financial sector remains a preferred investment due to clean balance sheets and margin expansion potential, though consumer companies face difficult trade-offs between volume growth and margin protection. A shift in foreign institutional investment toward India likely depends on a plateau in global AI-driven capital expenditure, which would prompt investors to seek returns in alternative markets.