AI Slump Revives Asia’s Forgotten Trades From China to India

The headline reports that a slump in AI-linked equities has prompted investors to revisit trades in Asian markets that had fallen out of favor, spanning China and India. The transmission mechanism appears to run through portfolio rotation and relative valuation: as high-multiple AI and semiconductor names sell off, capital is redeployed toward cheaper, under-owned markets and sectors that offer lower earnings expectations and more reasonable entry points. Chinese equities, which had been weighed down by property sector stress and weak sentiment, and Indian equities, which have traded at a premium to regional peers, are both exposed to shifts in foreign institutional flows that tend to reverse quickly when global risk appetite changes. The key near-term catalyst for traders is the next round of regional export and semiconductor shipment data, which will indicate whether the AI demand slowdown is cyclical or structural.

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