Nifty and Sensex Open Flat as Global Markets Face Brutal Sell-Off
Indian markets remain resilient as Nifty and Sensex open flat despite a massive sell-off in US tech stocks and Asian markets.
While global stock markets experienced a massive "bloodbath" on Friday, Indian equity benchmarks managed to hold their ground, opening marginally higher. Despite a sharp crash in US technology stocks and a wave of selling across Asian markets, the Nifty Sensex open flat trend showed a surprising level of resilience in the domestic market.
The Nifty 50 started the session at 24,538.20, marking a slight gain of 1.60 points (0.01 per cent). Similarly, the BSE Sensex opened at 79,413.66, climbing by 103.65 points, or 0.13 per cent. However, this stability was limited to the top indices; the broader market told a different story. The Nifty 100 dipped by 0.11 per cent, the Nifty Midcap 100 fell 0.54 per cent, and the Nifty Smallcap 100 saw a sharper decline of 0.87 per cent.
The US Tech Rout: What Triggered the Chaos?
The primary driver of the global turmoil was a devastating session in the United States. The Nasdaq plummeted by 5.52 per cent to close at 24,315.00, sliding more than 10 per cent below its previous record high and officially entering correction territory. The S&P 500 dropped 4.36 per cent to 7,353.73, while the Dow Jones Industrial Average crashed by 1,833.06 points (3.44 per cent) to settle at 51,523.06.
This sell-off completely erased the gains from the post-election rally seen on Wednesday. According to V K Vijayakumar, Chief Investment Strategist at Geojit Investments, the crash in the Nasdaq was sparked by fears of a significant slowdown in data centre spending, fueled by Democratic opposition to massive investments in that sector.
Why India is Staying Resilient
Despite the global carnage, experts believe India might be the least affected. Vijayakumar suggested that the deceleration in the AI trade in the US could actually turn out to be beneficial for India in the long run.
A major cushion for the Indian market has been the activity of Foreign Institutional Investors (FIIs). Over the last five trading sessions, FIIs have pumped in equities worth Rs 35,781 crore. This strong foreign buying has provided a critical safety net, offsetting the profit-booking and selling seen by Domestic Institutional Investors (DIIs).
Asian Markets in Freefall
The contagion from the US markets spread rapidly across Asia, with several indices recording staggering losses:
- South Korea (KOSPI): Fell over 7 per cent to 5,035.
- Taiwan: Weighted index declined by 8 per cent to 38,300.
- Japan (Nikkei 225): Dropped 5.95 per cent to 57,445.
- Singapore (Straits Times): Down 2.20 per cent to 5,180.
Furthermore, Dow Jones futures remained in the red, down 0.59 per cent, signaling that market sentiment remains fragile.
Sectoral Performance and Commodities
Within the NSE, the impact was mixed. While Nifty Auto saw a tiny bump of 0.10 per cent, other sectors struggled. Nifty IT was the hardest hit, sliding 1.32 per cent. Other declines included:
- Nifty Metal: Down 0.87 per cent
- Nifty PSU Bank: Down 0.75 per cent
- Nifty FMCG: Down 0.59 per cent
- Nifty Private Bank: Down 0.42 per cent
- Nifty Pharma: Down 0.34 per cent
Commodities Update
In the commodities market, Brent crude oil prices climbed 2.37 per cent, crossing the USD 100 per barrel mark once again. Conversely, precious metals saw a dip; gold prices fell 1.32 per cent to Rs 1,42,192 per 10 grams (24 karat), and silver prices dropped 1.78 per cent to Rs 1,83,800 per kg.