Indian equity markets opened lower on Wednesday, mirroring losses in global markets triggered by a selloff in technology stocks.
The benchmark Sensex opened at 81,646.60, down from its previous close of 81,820.12, while the Nifty50 began trading at 25,008.55, below Tuesday’s closing of 25,057.35.
The downturn follows a sharp decline in US markets, where the tech-heavy Nasdaq fell 1.4 per cent overnight. European semiconductor giant ASML’s disappointing outlook sparked a broader tech selloff, with the company’s shares plummeting 16 per cent.
This negative sentiment spilled over to Asian markets, with most indices trading lower on Wednesday morning.
“Wall Street’s major stock indexes closed lower on Tuesday, with a 1 per cent drop in the technology-heavy Nasdaq leading losses as chip stocks tumbled on demand concerns,” said Deepak Jasani, Head of Retail Research at HDFC Securities.
He added, “US stocks also got hit as a disappointing outlook from Europe’s most-valuable tech company and concern about tighter US restrictions on chip sales spurred a selloff in the industry that has powered the bull market.”
The technology sector’s weakness was further exacerbated by reports of potential US restrictions on advanced AI chip sales to certain countries, causing Nvidia shares to drop over 4 per cent.
In the Indian markets, HDFC Life led the gainers on the NSE, rising 1.76 per cent, followed by BPCL at 1.32 per cent and SBI Life at 1.25 per cent. On the flip side, Trent was the top loser, declining 1.84 per cent, with Nestle India and M&M following at -1.76 per cent and -1.61 per cent respectively.
Vikas Jain, Head of Research at Reliance Securities, noted, “The market is anticipated to open on a weak note due to significant declines in global markets, driven by disappointing quarterly results and poor guidance from semiconductor giant ASML.”
Despite the overall negative sentiment, some sectors showed resilience. “Sectors such as mid-cap, small-cap, realty, broking, defense, and oil marketing have shown significant gains, suggesting potential buying opportunities if the market sees further declines,” Jain added.
Oil prices rebounded slightly after Tuesday’s sharp drop, with Brent crude futures trading at $74.52, up 0.36 per cent. The recent decline in oil prices could potentially benefit oil marketing companies and provide some relief to the Indian economy.
Rahul Kalantri, VP Commodities at Mehta Equities Ltd, commented on the bullion market: “Gold and silver have exhibited significant volatility, recovering from their lows amid a decline in U.S. 10-year bond yields and increasing global instability linked to rising public debts.”
As the trading day progresses, market participants will be closely watching global cues and domestic factors for further direction. The ongoing geopolitical tensions and concerns about global economic growth continue to influence investor sentiment.