high stock valuations

Returns on midcaps were backed by stronger earnings growth, while small-cap performance relied more on investor optimism. That may now be changing .

SoftBank has surpassed Toyota as Japan's most valuable company, driven by massive investments in AI, particularly in OpenAI. Founder Masayoshi Son's pledge of €75 billion for European AI data centers fueled a significant stock surge. This shift highlights investor confidence moving from traditional manufacturing towards the burgeoning artificial intelligence sector.

India has dropped to seventh in global stock market valuation, overtaken by South Korea and Taiwan. This decline, attributed to sustained foreign fund selling and muted corporate earnings, contrasts with the AI chip leadership of South Korean and Taiwanese firms. Despite a recent Sensex uptick driven by domestic buying, foreign investors remain net sellers, impacting India's market cap.

Indian markets opened mixed on Thursday. US stocks saw a mixed start as AI shares pulled back, but falling oil prices boosted investor mood. The S&P 500 edged up, while the Nasdaq dipped. The Dow Jones Industrial Average showed strong gains. Easing oil prices, driven by hopes of a Strait of Hormuz reopening, provided support.

Wall Street saw a rebound on Monday, led by technology and AI-linked stocks that bounced back from Friday's sharp sell-off. The S&P 500, Dow Jones, and Nasdaq Composite all gained ground as investors reassessed recent market movements. Meanwhile, oil prices eased from overnight peaks despite ongoing geopolitical tensions.

A San Francisco luxury home is offering a unique payment option: accepting stock from AI companies like Anthropic or OpenAI instead of cash. The $2,995,000 listing has generated significant interest, with many tech employees and investors holding substantial but illiquid AI stock. This trend highlights the growing influence of AI on the city's booming real estate market.

At a time of global economic turmoil, why are some global markets like the US, Taiwan and South Korea rallying? Why has the Indian stock market slipped from record highs, giving negative returns over the last few quarters?

In the cases of both South Korea and Taiwan, the stock market rally is fuelled by a powerful surge in semiconductor giants that are benefiting from the global artificial intelligence boom.

The AI chip sector experienced a dramatic $1.3 trillion market value collapse in under 24 hours, marking the deepest one-day drop for the PHLX chip index since March 2020. This selloff was triggered by Broadcom's quarterly report, which revealed weaker-than-expected demand for its custom AI chips, fueling investor anxieties about the AI trade's detachment from reality.

Tata Consultancy Services (TCS) experienced its steepest single-day decline since March 2020, plunging over 8% and erasing recent gains. Market experts attribute the sharp reversal to strong resistance near a key technical zone, triggering profit-booking and renewed selling pressure. Analysts are now watching critical support levels, concerned about the sustainability of any near-term recovery.

SpaceX's monumental $1.75 trillion IPO is generating immense global interest, with bankers reporting double the demand for available shares. While Indian investors cannot directly participate in the IPO allotment, they can invest in SpaceX shares on secondary markets after listing through international brokers under the RBI's LRS scheme.

Indian IT stocks surged Monday, with major players like Infosys and TCS gaining up to 5%. This rebound follows months of AI-driven pessimism, as investors reassess sector valuations ahead of a key US Federal Reserve meeting. Technical indicators suggest a potential short-term recovery, though analysts caution it might be a retracement within a broader trend.

Analysts are bullish on Titan, projecting strong jewellery revenue growth and market share gains. Bharti Airtel's mobile money arm, Airtel Money, is set for a significant IPO. Adani Ports shows robust cargo volume growth, exceeding expectations. Maruti Suzuki is poised to benefit from first-time buyer segment revival and market share expansion.

Wall Street neared record highs as falling crude oil prices eased inflation concerns, boosting investor sentiment. Major indices saw gains, with technology and retail stocks performing well. However, oil and gas companies faced pressure, while Treasury yields declined amid reduced inflation worries.

Tech stocks, particularly semiconductors, experienced a significant downturn Friday, driven by investor caution over AI valuations and robust US jobs data. The PHLX Semiconductor Index saw its steepest drop since March 2020, erasing billions in market value. This retreat follows a period of record highs, with strong employment figures fueling concerns about interest rate cuts.

OpenAI, the creator of ChatGPT, has confidentially filed for a US IPO, reportedly targeting a valuation of up to $1 trillion. This move follows a legal victory and places OpenAI alongside rivals Anthropic and SpaceX in a surge of AI companies seeking public market access. The company's rapid growth, fueled by ChatGPT's popularity, is driving significant investor interest.

Opposition is mounting against SpaceX's proposed IPO due to concerns over Elon Musk's significant control and the company's governance structure. Major pension funds and U.S. public investment officials have raised red flags, warning of weakened transparency and limited shareholder protections. The American Federation of Teachers has also urged the SEC to scrutinize SpaceX's framework before its public trading.

Adani Power’s market value currently stands at nearly Rs 4.85 lakh crore, higher than Infosys, whose market capitalization is around Rs 4.72 lakh crore. Following the latest reshuffle, Adani Power has emerged as India’s 11th most valuable listed company.