Global Sell-Off Rattles Markets As AI Stocks Plunge

Entering Thursday, Indian markets opened cautiously following significant losses in US markets due to tech and AI stock sell-offs. The Nifty 50 and BSE Sensex reflected this cautious sentiment. Market experts cited investor concerns over AI investments and US tariff impacts as key factors in this downturn.

On Thursday, Indian stock markets opened with a cautious tone, reflecting the significant overnight losses in US markets. Investors were seen booking profits in high-valuation technology and artificial intelligence stocks, drawing from weak global cues that pressured most sectors.

The Nifty 50 index commenced trading at 25,772.70, dipping by 45.85 points or 0.18%, while the BSE Sensex started at 84,518.33, dropping 41.32 points or 0.05%. This cautious approach was partly due to renewed selling pressure in global indices following market corrections in the US.

Industry experts noted that the US equities sell-off has begun to impact global markets, including India. An extended losing streak in US markets primarily stemmed from profit-taking in tech and AI stocks, which previously enjoyed sharp rallies. Ajay Bagga, a Banking and Market expert, said, 'Global markets are seeing a tech stock risk-off.' Concerns around the sustainability of AI investments and capex have surfaced amid a lack of revenue traction. India's market has notably underperformed due to a weak rupee, foreign portfolio outflows, inadequate FDI inflows, and sentiment disrupted by US tariffs.

The broader market indices also mirrored this fragility. On the NSE, the Nifty 100 fell by 0.15%, the Nifty Midcap 100 eased down by 0.10%, and the Nifty Smallcap 100 declined by 0.13%, showcasing pervasive cautious sentiment. Sector-wise, almost all traded in the red, bar the Nifty IT, which gained over 1%. Nifty Auto over 1%, Nifty Pharma dropped 0.66%, Nifty FMCG shrunk 0.11%, Nifty Media decreased 0.41%, and Nifty Realty fell by 0.53%.

Ponmudi R, CEO of Enrich Money, indicated that the Nifty 50 remains within a rising channel structure, with the 25,800-25,700 zone acting as key near-term support. He suggested that unless this base fails, the broader uptrend may continue despite short-term volatility driven by global weaknesses. However, intensified selling, especially from long unwinding, could push the index to a deeper correction towards the 25,500-25,400 area. In a related development, four European central banks are expected to meet, with forecasts suggesting a quarter-point rate cut by the Bank of England, while others like the ECB are likely to maintain current rates.

Globally, markets continued to display weakness amidst uncertainties over AI-related investments, cuts in funding for data centers, and shifts to more defensive sectors. Asian markets opened on a weak note, mirroring Wall Street's subdued sentiment after sustained selling pressure. (ANI)

(With inputs from agencies.)