# AI Market Shifts Could Boost Indian Investor Interest

> When US AI growth slows, Indian markets may see renewed investor interest as capital seeks stronger domestic growth.
- Title: AI Market Shifts Could Boost Indian Investor Interest
- Summary: When US AI growth slows, Indian markets may see renewed investor interest as capital seeks stronger domestic growth. S Naren predicts India could rebound in…
- Keywords: s naren, icici prudential, ai market rally, indian equities, investor interest, us ai cycle, fpi flows, market correction, ipo pricing, insurance sector, earnings growth, global interest rates
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/expert-view/india-could-see-rebound-in-investor-interest-when-ai-led-rally-slows-s-naren/articleshow/134683390.cms
- Author: Prashant Mahesh
- Published: 2026-10-05T01:01:00+00:00
- Read time: 1 min
- Topics: s naren, icici prudential, ai market rally, indian equities, investor interest, us ai cycle, fpi flows, market correction, ipo pricing, insurance sector, earnings growth, global interest rates
## S Naren on investor expectations
Sankaran Naren, ICICI Prudential Mutual Fund's CIO, warns lump-sum investors are losing money while SIP investors see low single-digit returns.
## Current market conditions
The US AI cycle drives global markets, geopolitical risks remain elevated, and global equity markets are expensive.
## Overvalued sectors
Sectors tied to US AI appear overvalued unless investors have a growth mindset, while small- and mid-cap stocks lack cheapness due to sustained inflows.
## AI slowdown potential
When US AI growth slows, Indian markets could see a rebound in investor interest as capital shifts toward stronger domestic growth prospects.
## IPO market trends
IPOs trade at higher prices than older listed companies, with a bull market in IPOs outpacing broader market performance.
## Insurance sector outlook
Private-sector banks and insurance sectors show growth potential following proposed regulatory changes that boost customer-friendly policies.
## Earnings growth forecast
Near-term earnings growth remains decent due to positive inflation, but medium-term growth depends on US AI cycle shifts.
## Gold and foreign investment
Investors should avoid momentum-driven overseas allocations as global markets have moved significantly, with bonds offering safer alternatives.
## FPI flows and interest rates
FPIs may return to India only if global interest rates drop, as current US rates are near two-decade highs.
## Key takeaway

S Naren predicts India could rebound in investor interest when the US AI-led market rally slows.