0908 GMT - Indian equities are expected to outperform its global peers in major markets over the next 18 months, supported by strong fundamentals and limited exposure to artificial intelligence, Capital Economics says. Economist Megan Fisher says valuations and earnings growth no longer appear stretched, as rising valuations elsewhere have narrowed India's valuation premium. Strong economic and corporate earnings growth should support equities, with real investment expected to exceed consensus forecasts. Indian stocks are also less vulnerable to a broad AI-driven selloff expected in 2027 as market has relatively low weighting in AI and semiconductor companies. Meanwhile, strong domestic retail inflows are likely to persist, while foreign demand is projected to recover. CE forecasts the MSCI India Index to rise more than 4% by year-end before falling 5% in 2027.