AI Selloff Pushes Investors Toward China and India

TL;DR: Investing.com reported on November 7 that investors are shifting toward Chinese and Indian equities, and toward Asian sectors that depend less on technology, as a selloff in artificial intelligence stocks raises doubts about valuations and returns on infrastructure spending. The numbers behind that shift are large enough to read closely.

What happened to Chinese and Indian stocks last week?

Both markets posted their best weeks in a long time. According to Investing.com, a Hong Kong index tracking mainland Chinese companies gained 5.2% last week, its strongest performance since March 2025. The Nifty 50 rose 8.6%, its biggest weekly advance since 2021.

Foreign money followed. Overseas investors bought a net $1.9 billion of Indian equities through Wednesday, according to Investing.com, reversing earlier weakness in a market that had lagged global peers for much of the year.

Market	Last week's move	What the report says
Hong Kong index of mainland companies	+5.2%	Best week since March 2025
India's Nifty 50	+8.6%	Biggest weekly gain since 2021
Indian equities, foreign flows	Net $1.9 billion bought	Through Wednesday, reversing earlier weakness

The table shows two different kinds of evidence. Index gains describe price. The foreign purchases describe who was buying, and that is the more telling number for whether the move has support behind it.

Why did the AI selloff send money to Asia?

The rotation follows a sharp decline in semiconductor-heavy markets after the U.S. midterm elections, according to Investing.com. Investors are reassessing their exposure to companies that supply the global AI buildout.

That explains the odd part of the story. Asia took a beating. South Korea's Samsung Electronics and SK Hynix, along with Taiwan Semiconductor Manufacturing, have faced selling pressure as doubts grow over whether AI investment will deliver sufficient profits, per Investing.com, so the region's biggest names sit close to the thing investors now question. The money moving into China and India is heading toward markets with a wider range of non-AI exposure.

Where are fund managers putting the money?

According to Investing.com, managers are favoring domestic growth, including Indian financial companies, contract drug manufacturers and consumer-focused businesses. Vietnam is also drawing attention. In South Korea, investors are looking past the big chipmakers toward cosmetics, entertainment, retail and food companies.

Several named firms are on record. Business Standard reported that Aberdeen Investments favors markets with stronger domestic growth, including India and Vietnam, and sees upside in Chinese technology firms. Hedge fund Lotus Asset Management is long Hong Kong equity futures, and Allianz Global Investors is looking at healthcare and consumer companies.

Rajeev De Mello, global macro portfolio manager at Gama Asset Management, told Business Standard: "I expect investors to diversify more broadly and reduce their concentration in the AI trade." He added that India could benefit, although its dependence on imported energy remains a headwind.

What does this mean for an investor with a concentrated portfolio?

The practical question is how much of your portfolio rides on one theme. Many accredited investors hold large U.S. technology positions directly, and again through index funds and through private holdings that depend on the same AI demand. A selloff in that theme hits all three at once.

One week of strong returns does not make a trend. The reporting does not say how long the rotation will last, and the Nifty's weekly gain followed a stretch when, per Investing.com, the market had lagged global peers for much of the year. Fast rallies from a low base can reverse just as fast.

Private-market holders face a related question. Late-stage valuations were set during the AI boom, and a public repricing can feed into later rounds. Our look at how down rounds hit investors covers the mechanics, and the guide to pre-IPO investing and secondary markets explains how those prices get set.

Common mistakes after a rotation headline

The first mistake is chasing last week's winner. A market that rose 8.6% in a week has already repriced, and the buyer who arrives after the headline pays for it.

The second is treating diversification as a single trade. Moving from one crowded theme into another, with thinner liquidity and different currency and energy-price risks, swaps one concentration for a different one.

The third is ignoring what you already own. Check the holdings inside your funds first, because a global or emerging-markets fund may already carry large positions in Samsung, SK Hynix and TSMC. For assets that behave differently from equities altogether, see the guide to gold, commodities and real assets as inflation hedges.

FAQ

Why are investors buying Chinese and Indian stocks now?

According to Investing.com, investors are seeking cheaper valuations and less concentrated technology exposure after the AI selloff. Business Standard reported that India and China are seen as markets with a considerable array of non-AI exposures.

How much did India's Nifty 50 rise?

The Nifty 50 rose 8.6% last week, its biggest weekly advance since 2021, according to Investing.com. Overseas investors bought a net $1.9 billion of Indian equities through Wednesday.

Is India's rally safe from here?

No source in this reporting says so. Rajeev De Mello of Gama Asset Management told Business Standard that India's dependence on imported energy remains a headwind, and the rally follows a year in which the market lagged global peers.

Which Asian sectors are fund managers watching?

Investing.com names Indian financials, contract drug manufacturers, consumer businesses, Vietnamese domestic growth, and South Korean cosmetics, entertainment, retail and food companies. Allianz Global Investors is looking at healthcare and consumer companies, per Business Standard.

One thing to do today

Open the holdings list of each fund you own and add up how much of your total portfolio sits in AI chip suppliers and the companies that buy from them. Write that number down before deciding whether last week's rotation changes anything for you, and talk to a qualified adviser before acting on it.

Educational content only. Not investment, tax, or legal advice. Not an offer or solicitation to buy or sell securities. Past performance does not guarantee future results. Private-market investments are illiquid and involve risk of loss, including total loss of capital. Consult qualified advisers. Angel Investors Network is not a broker-dealer or investment adviser.