Global Sell-Off Hits Indian Markets: What's Next for Investors?

The Indian stock market started the day on a cautious note, tracking sharp overnight losses in the US markets. This comes as investors booked profits in high-valuation technology and artificial intelligence stocks, leading to early selling pressure across most sectors.

Market Performance

The Nifty 50 index opened at 25,772.70, down by 45.85 points or 0.18 per cent, while the BSE Sensex started the day at 84,518.33, slipping 41.32 points or 0.05 per cent. The weakness was also visible in the broader market indices, with the Nifty 100 declining by 0.15 per cent, the Nifty Midcap 100 slipping 0.10 per cent, and the Nifty Smallcap 100 down by 0.13 per cent.

Sectoral Performance

Most sectors traded in the red, except for Nifty IT, which gained more than 1 per cent. Nifty Auto lost more than 1 per cent, Nifty Pharma declined 0.66 per cent, Nifty FMCG slipped 0.11 per cent, Nifty Media fell 0.41 per cent, and Nifty Realty was down by 0.53 per cent.

Expert Insights

Experts believe that the sell-off in US equities has started impacting global markets, including India. The US markets extended their losing streak overnight, mainly due to profit booking in technology and AI-related stocks. Ajay Bagga, a banking and market expert, notes that global markets are seeing a tech stock risk off, with AI models and huge capex by AI hyperscalers being questioned for sustainability and returns on investments.

Global Market Outlook

Four European central banks meet on Thursday, with the BOE expected to cut rates by a quarter point, while the European Central Bank, Norges Bank, and Riksbank are expected to hold rates steady. Global markets remain weak due to concerns over returns from AI capital expenditure, reports of funding pullbacks in data centre investments, and a shift towards defensive sectors.

Remember, this is a perspective, not a prediction. It's essential to do your own research and consider your own risk tolerance before making any investment decisions. The Indian market's performance will depend on various factors, including global market trends, economic indicators, and company performances.

Key Takeaways

• The Indian stock market started the day on a cautious note, tracking sharp overnight losses in the US markets.
• The Nifty 50 index and BSE Sensex opened lower, with most sectors trading in the red.
• Expert insights suggest that the sell-off in US equities has started impacting global markets, including India.
• Global markets remain weak due to concerns over returns from AI capital expenditure and a shift towards defensive sectors.