Indian Markets Expected to Open Lower Tracking Global Tech Sell-Off, Despite Strong FII Buying

Indian markets face a weak opening with the Gift Nifty signaling a drop of around 170 points following a heavy global sell-off triggered by artificial intelligence and semiconductor stocks. However, domestic markets continue to draw support from strong foreign portfolio investor buying and better-than-expected Q2 financial results.

Indian equity markets are expected to open on a weak note following a sharp sell-off across global markets driven by a correction in artificial intelligence and semiconductor stocks. The Gift Nifty indicated a gap-down opening of approximately 170 points, trading at 24,415.

Global equities experienced significant downward pressure after Wall Street recorded heavy losses. The Nasdaq plunged 5.52 percent, pushing benchmarks into correction territory, while the S&P 500 declined 4.36 percent and the Dow Jones Industrial Average fell 3.45 percent. The ripple effect spread rapidly across Asian markets, with South Korea's Kospi dropping nearly 9 percent at market open, prompting a 20-minute trading halt on the exchange. Japan's Nikkei 225 also fell by more than 5 percent.

Despite the global downturn, select Indian American Depository Receipts (ADRs) demonstrated resilience. Infosys ADRs jumped 4.6 percent, while Wipro ended flat. ADRs for HDFC Bank and ICICI Bank also closed higher, signaling underlying strength in Indian stocks.

Market analysts note that foreign portfolio investors (FPIs) have turned heavy buyers, providing a crucial cushion for domestic equities. FPIs recorded a single-day buying session of ₹14,974.68 crore on Thursday, marking their largest single-day purchase in over six years. Additionally, India Inc's Q2 financial performance has contributed to market resilience, with the majority of company results beating expectations.

Ponmudi R, CEO of Enrich Money, commented that global markets have come under significant selling pressure following the overnight sell-off on Wall Street, driven by the unwinding of AI-related trades. He cautioned that investors are likely to remain cautious as global technology valuations, crude oil prices, and FII buying sustainability dictate near-term market direction.

Meanwhile, WTI crude oil prices have staged a technical rebound, moving toward the $91-per-barrel mark. This upward movement keeps concerns regarding India's energy import bill, external balances, and potential inflationary pressures in focus for domestic markets.

"While global macroeconomic headwinds and technology sell-offs create short-term volatility for Indian equities, the recent surge in foreign institutional investment and robust corporate earnings demonstrate the underlying strength of the domestic market. Investors must remain vigilant, balancing global risk sentiments with fundamental domestic performance." — Dr. Shishir Gupta, Founder & CEO, StartupLanes