Global Chip Rout Deepens as AI-Linked Stocks Plum Amid Valuation Concerns
Indian companies with exposure to artificial intelligence technology faced a sharp correction on July 17, with stocks falling up to 5% amid a broader selloff in Asia's chip sector.The decline comes as the global semiconductor landscape faces intensifying scrutiny. Traders are increasingly wary of valuations that have surged during this year's rally, leading to a rapid exit from positions in high-growth tech names.
Nasdaq Futures and S&P 500 Hit by Semiconductor Selloff
Nasdaq 100 futures tumbled 2% as the global selloff in chipmakers gathered pace. This downward pressure extended to the rest of the market, with contracts for the S&P 500 falling 1%.A closely watched exchange-traded fund tracking semiconductor firms saw a significant drop of 4.4% in premarket trading. The sentiment remains bearish as the selloff spread throughout Asia, where Taiwanese stocks fell into a technical correction and the region's main benchmark hit a two-month low.
European Markets See Significant Tech Pullback
The pressure on the semiconductor supply chain is evident across continents. In Europe, chip-linked stocks such as ASM International NV and Aixtron SE tumbled more than 4%.Market participants are now questioning whether the massive gains fueled by the artificial intelligence buildout have run too far to justify current elevated valuations. The core concern revolves around whether hundreds of billions of dollars in spending by AI hyperscalers will eventually deliver lucrative returns to sustain high demand for chips.
Indian Tech and Infrastructure Stocks Face Heavy Selling
Domestic sentiment reflected these global trends as shares of Netweb Technologies, E2E Networks, and Black Box fell 1%, 4%, and 4.4%, respectively, during afternoon trading on July 17.The selloff also impacted industrial equipment makers that provide critical infrastructure to data centres. GE Vernova T&D India, Hitachi Energy India, and CG Power were among the top midcap losers on July 17 as investors reacted to the cooling tech sentiment.
Major Industrial Players See Sharp Declines
GE Vernova shares fell 5% during the session. Meanwhile, CG Power and Hitachi Energy India were trading 2% and 4% lower, respectively, highlighting the broad-based pressure on companies linked to the AI infrastructure ecosystem.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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