GIFT Nifty drops 150+ points amid global AI stock sell-off
What's the story
The GIFT Nifty, an early indicator of Indian equity market performance, has witnessed a sharp decline of over 150 points. The fall comes in the wake of a global sell-off in artificial intelligence (AI)-linked stocks and semiconductor companies across Asia. The downturn was led by Japan and South Korea, with their respective indices, Nikkei 225 and Kospi, plummeting by 4.5% and up to 6.8%.
Market response
Other Asian markets also witness decline
The global sell-off has also impacted other Asian markets. Hong Kong's Hang Seng index fell by 1.7%, China's Shanghai Composite dropped by 1.4%, and Taiwan's Taiex declined by 3.6%. Australia was the only major market that managed to stay afloat amid these developments. The decline in these indices reflects a wider trend of investors cashing in on gains after a strong performance from AI-related stocks over the past few months.
US impact
Wall Street's mixed performance affects Asian markets
The mixed performance of Wall Street, with technology stocks under pressure despite better-than-expected earnings from chipmakers Qualcomm and Micron Technology, has also affected Asian markets. Apple shares fell sharply after the company announced price hikes on several products. These developments have further contributed to the overall negative sentiment in the global market, impacting countries like India.
Market outlook
Immediate upside target for Nifty at 24,500
The sharp decline in GIFT Nifty indicates that domestic markets may open lower, mirroring the weak global cues and ongoing caution around highly valued technology stocks. Rupak De, Senior Technical Analyst at LKP Securities, said despite the Nifty's failure to break above a falling trendline on the daily chart, it remains in a positive short-term trend. He added that as long as index holds above 23,800, the trend is likely to remain positive with an immediate upside target of 24,500.