GIFT Nifty Plummets as Big Tech Giants Flag Sustainability of AI Spending Amid Global Sentiment Shift

GIFT Nifty Plummets as Big Tech Giants Flag Sustainability of AI Spending Amid Global Sentiment Shift​

GIFT Nifty registered a significant decline this morning, signaling subdued global market sentiment despite Indian equities being closed for Muharram. The index traded at 24,010 around 8:45 am, down 105 points or 0.44 percent from the previous day’s close. This immediate weakness followed a volatile session for domestic markets on Thursday, where benchmark indices managed to finish marginally higher.

Global Tech Weakness Drives Caution in Wall Street and Asian Markets​

Global sentiment remained decidedly cautious as Wall Street closed with mixed results. The Dow Jones Industrial Average posted a small gain of 0.14 percent, while the S&P 500 saw little movement. However, the Nasdaq Composite shed 0.46 percent after large technology stocks experienced fresh selling pressure.

The market concerns focused on whether heavy debt-funded spending on artificial intelligence infrastructure could be sustained by tech giants. Apple shares dropped sharply by 6.1 percent after announcing price increases for iPads and MacBooks to counter rising memory and storage chip costs, thereby wiping out roughly $250 billion in market value. Nvidia, Microsoft, and Alphabet also saw declines as investor sentiment wavered regarding long-term AI infrastructure spending.

Semiconductor Strength Provides a Mixed Picture​

Despite the broad tech pullback, certain specialized areas of the semiconductor ecosystem showed remarkable resilience. Shares from Micron Technology surged nearly 16 percent after forecasting stronger than expected revenue growth. Sandisk jumped 22 percent, while Qualcomm, Western Digital, and Seagate also posted sharp gains, highlighting that underlying demand for AI-linked components remains robust in specific niches.

Asian Markets Mirror Cautious Global Mood​

Asian equity markets reflected the prevailing cautious sentiment seen on Wall Street. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.7 percent after having recently reached a record high. Japanese Nikkei declined by around 3 percent, and South Korea's Kospi dropped 3.5 percent. Both Hong Kong's Hang Seng and China's CSI300 also traded lower. Nasdaq futures continued to slip in Asian trade, registering a drop of around 0.6 percent, indicating persistent pressure on technology stocks.

Crude Oil Prices Ease, Reducing Geopolitical Risk Premium​

Oil prices experienced another easing trend on Friday, with markets anticipating steep weekly losses. Brent crude slipped 0.25 percent to approximately $75 per barrel, while US West Texas Intermediate traded below $72. Both benchmarks are tracking toward a weekly decline of about 7 percent.

This fall in oil costs is particularly significant as it effectively erases the geopolitical risk premium that had accumulated during the Iran conflict. For major importing economies like India, this price easing supports reduced inflationary pressures and lower import costs.

Institutional Flows Remain Mixed Ahead of Next Session​

Institutional investment flows showed a mixed picture during the previous trading session. Foreign institutional investors (FIIs) sold Indian equities amounting to Rs 384 crore, continuing their cautious stance. In contrast, domestic institutional investors (DIIs) provided solid support by net purchasing shares worth Rs 5,748 crore. Year-to-date statistics show FIIs as net sellers of nearly Rs 3.46 lakh crore, while DIIs have accumulated a net purchase of Rs 4.57 lakh crore.