Jefferies’ Chris Wood Sees India Gaining From Reverse AI Trade, But Flags Iran Conflict Risks To Markets

India could attract more foreign investment if global investors begin moving away from artificial intelligence (AI) stocks, according to Jefferies strategist Christopher Wood. However, a fresh conflict involving Iran could pose a major risk to Indian equities.

In his GREED & fear report dated 12 November 2026, Wood identified India as a potential beneficiary of a reversal in the AI investment trend.

Why Could India Benefit From A Reverse AI Trade?

Experts believe investors are reassessing heavy AI spending by major US technology companies as expectations of returns weaken. Wood believes this could encourage capital to move towards markets like India.

Foreign investors purchased a net $7.2 billion worth of Indian equities over three weeks. This included $5.2 billion in the week ended 6 November 2026.

The recent buying follows net foreign outflows of $32.4 billion from Indian equities during 2026.

India's Investment Recovery And Market Valuations

India's machinery imports rose from $29 billion in FY21 to $62 billion in FY26. The figure climbed further to $67 billion for the 12-month period ended September 2026.

On the valuation front, the Nifty was trading at 18.4 times its estimated earnings for the next year. The Nifty MidCap 100, in comparison, was valued at 23.1 times.

Domestic equity mutual funds recorded inflows of ₹35,000 crore in October 2026.

Why Does Iran Remain A Major Risk For Indian Equities?

Wood also pointed to tensions involving Iran as a concern for Indian markets. Another conflict in the region could lead to a rise in oil prices. This may lead to increased pressure on equities and reduced investor confidence.

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