RBI flags elevated AI stock valuations as potential risk to financial stability
The Reserve Bank of India (RBI) warned that a correction in global equity markets, particularly in AI-related stocks, could impact domestic markets. The central bank's Financial Stability Report highlighted that elevated valuations and market concentration in AI investments pose systemic risks, with a potential spillover effect on India. Recent volatility in markets like South Korea, Taiwan, and Japan underscores the need for caution as AI-driven equities continue to dominate performance.