Christopher Wood of Jefferies plans to increase his India allocation once the current global rally in semiconductor and AI stocks hits a peak. While he remains positive on India’s structural growth with a 15% annual return projection, he is maintaining a neutral stance for now. He recently reshuffled his India portfolio, adding MCX and Bajaj Finance, while exiting positions in HDFC Bank, PB Fintech, and REC.
Christopher Wood, the global head of equity strategy at Jefferies, has signaled that he is waiting for the ongoing rally in global semiconductor and AI-related stocks to reach a peak before increasing his allocation to India. Wood views the current movement of capital into markets like Taiwan and South Korea—driven heavily by demand for artificial intelligence hardware—as a primary reason that global funds have been diverted away from the Indian market. He suggests that once this global semiconductor trade loses momentum, capital is likely to flow back into Indian equities.
In August 2026, Wood adjusted his long-only India portfolio to reflect these strategic views. He added positions in MCX, Lenskart, and Bajaj Finance. Concurrently, he reduced his exposure to other segments of the financial and fintech space, exiting positions in HDFC Bank, PB Fintech, and REC. These portfolio changes highlight his selective approach, focusing on specific domestic growth stories even while he holds a broader neutral stance on the market.
Despite the temporary neutral position, Wood continues to maintain a positive outlook on the India structural growth story. He has projected potential returns of approximately 15% over the next twelve months. However, he clarified that this optimistic scenario assumes there will be no major geopolitical shocks that could destabilize global trade routes or energy prices.
Investors should monitor several risks that Wood highlighted as potential headwinds. A key factor is the US 10-year Treasury yield, which recently reached 5% in September 2026. Higher yields in the US often reduce the appeal of emerging market equities for global investors. Additionally, there is a risk associated with the current focus on AI; if global investors begin to realize that the massive capital spending by tech companies on AI infrastructure is not generating the expected returns, it could trigger a correction in semiconductor-heavy markets.
Domestically, Wood also pointed to a structural risk: the Indian market’s heavy reliance on steady and continuous inflows from retail mutual funds. If these retail investments were to slow down or stop, it could lead to significant market volatility, especially if valuations remain at current levels. For investors, the next important update to track will be whether global capital starts to rotate out of AI-heavy technology stocks as interest rate expectations change and whether domestic mutual fund inflows remain consistent.