RBI Warns: AI Stock Rally Fuels Asian Market Risk, US Correction Threat Looms

• RBI's Financial Stability Report flags risk from AI-linked stocks driving bulk of Asian market gains.
• A narrow set of big tech stocks accounts for nearly half of returns in Hong Kong, South Korea, and Taiwan, mirroring the US market.
• This rising concentration makes markets vulnerable to sudden shifts in investor sentiment.
• RBI warns a major US equities correction could become a global systemic risk, dragging down Asian markets.
• Concerns also raised about massive capital spending for AI, rising debt financing, and complex circular financing structures.

Why It Matters: RBI cautions that AI-driven stock concentration in Asia poses significant market and systemic risks.