Transforming the Indian Stock Market: The Role of Artificial Intelligence in Trading and Decision-making

Abstract

This study explores the integration of artificial intelligence (AI) in the Indian stock market, focusing on its impact on equity trading and investment decisions. The research adopts a mixed-methods approach, utilising surveys and interviews to analyse traders’ profiles, social media influence and the effectiveness of AI-driven tools. Findings reveal that most traders are young investors allocating less than 25% of their portfolios to equities. Social media platforms, particularly Telegram and Instagram, play a significant role in shaping investment decisions, with stock analysis and recommendations being the most consumed content. AI tools, such as stock screeners and financial news aggregators, have moderately improved decision-making efficiency, though concerns regarding their reliability persist. The study underscores the need for enhanced educational initiatives for traders, improved AI tool functionality and stricter regulatory frameworks to ensure transparency and trust in AI-driven trading. By addressing these challenges, stakeholders can harness AI’s potential to foster a more efficient and competitive financial ecosystem in India.