US Stocks Soar, India Lags: Why Global Capital Shifts Away From Dalal Street

• US stock markets, driven by tech and AI, hit record highs (S&P 500, Nasdaq) due to hopes of easing global tensions and potential Fed rate cuts.
• India's market shows divergence, lagging behind US, Japan, and other Asian markets, with single-digit returns compared to US double-digits.
• Jefferies identifies India as a 'reverse AI trade' example, where global AI investment doesn't boost Indian earnings despite high valuations.
• High valuations, slow revenue growth, and decreasing foreign investor interest are key challenges for the Indian market.
• India's recovery hinges on US monetary policy easing (Fed rate cuts) or significant improvement in domestic demand and corporate earnings.

Why It Matters: India's stock market lags US tech-driven rally due to 'reverse AI trade' and FPI exit, needing Fed cuts or domestic growth.