Indian Stock Market Plunges: Nifty50, Sensex Crash Over 700 Points Amid Global Selloff
Indian equity benchmarks, the Nifty50 and BSE Sensex, experienced a severe crash during opening trade on Friday, driven by weak global market signals and an ongoing selloff in information technology stocks. The Nifty50 plummeted below the critical 25,600 mark, while the BSE Sensex dropped by over 700 points, reflecting heightened investor anxiety.
Market Performance and Key Levels
At 9:16 AM, the Nifty50 was trading at 25,592.75, registering a significant decline of 214 points or 0.83%. Simultaneously, the BSE Sensex stood at 82,931.27, down by 744 points or 0.89%. This sharp downturn underscores the volatile phase that markets have entered, with experts predicting range-bound trading in the near term as the December quarter earnings season concludes.
Expert Insights on Market Turbulence
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, provided a detailed analysis of the current market scenario. He stated, "Markets have fallen into a turbulent phase which will cause some panic among investors even while offering opportunities. The selloff in AI stocks in US markets was expected, but the timing and extent were uncertain. The 2.04% decline in Nasdaq is not a crash, but if the downtrend continues, it could pull the US market down."
Dr. Vijayakumar highlighted that for the Indian market, this correction in AI stocks is positive, as India, being an AI laggard, could not participate in last year's global rally driven by AI trades. He explained, "So the unwinding of the AI trade, if it persists, is a positive from the Indian perspective. However, what is rattling the Indian market now is the massive selloff in IT stocks, which represent the second largest profit pool of India Inc. The real impact of the 'Anthropic shock' on the IT sector is yet to be ascertained."
He advised caution, noting that panic selling in IT stocks at this stage may not be prudent. "Investors may wait and watch for the dust to settle. The market turbulence can be used to accumulate high-quality growth stocks, particularly those that have delivered strong Q3 results." Additionally, he pointed out that auto stocks are likely to remain resilient due to excellent results and growth prospects, offering buying opportunities during any downtrend.
Global Market Influence and Investor Focus
The decline in Indian markets mirrors broader global trends. On Thursday, Wall Street benchmarks ended sharply lower, with the technology-heavy Nasdaq dropping approximately 2% as investors accelerated selling in technology stocks and shifted away from transport shares. Rising concerns about the impact of artificial intelligence on various sectors contributed to this selloff.
Asian markets also retreated from recent highs, tracking weakness in US technology stocks. Fresh apprehensions regarding how artificial intelligence could disrupt multiple sectors weighed on sentiment, prompting investors to move toward safer assets such as US Treasuries.
Looking ahead, investors are expected to shift their focus to upcoming global inflation data, trade-related developments, and foreign institutional investor flows. Concerns around AI-led disruptions are likely to continue contributing to market volatility in the near term.
Institutional Activity and Market Data
Despite the market downturn, foreign portfolio investors were net buyers of equities worth Rs 108 crore on Thursday. Domestic institutional investors also remained net buyers, purchasing shares worth Rs 277 crore, according to exchange data. This indicates that while retail sentiment may be bearish, institutional players are still finding value in select segments.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
