GIFT Nifty tumbles over 150 points as global sell-off in AI stocks rattles sentiment

GIFT Nifty was down more than 150 points on Friday, signalling a weak start for Indian equities after a broad sell-off swept through Asian markets amid heavy profit booking in artificial intelligence (AI)-linked stocks.

The weakness followed sharp declines across Asia, with Japan and South Korea leading the losses. Japan’s Nikkei 225 fell 4.5%, while South Korea’s Kospi dropped as much as 6.8%, dragged lower by steep losses in semiconductor giants Samsung Electronics and SK Hynix. Hong Kong’s Hang Seng declined 1.7%, China’s Shanghai Composite lost 1.4% and Taiwan’s Taiex fell 3.6%. Australia was the lone major market to buck the trend, edging higher.

The sell-off came after investors rushed to lock in gains following the strong rally in AI-related stocks over recent months. Market sentiment also weakened after Wall Street ended mixed overnight, with technology stocks coming under pressure despite better-than-expected earnings from chipmakers Qualcomm and Micron Technology. Apple shares also declined sharply after the company announced price increases across several products.

Technology stocks bore the brunt of the selling in Asia. Samsung Electronics dropped 7%, SK Hynix lost 6.6%, while Japan’s SoftBank Group slumped more than 13% and semiconductor equipment maker Advantest fell nearly 11%.

For Indian markets, investors will also keep an eye on key technical levels after Thursday’s volatile session.

According to Rupak De, Senior Technical Analyst at LKP Securities, the Nifty remains in a positive short-term trend despite failing to break above a falling trendline on the daily chart.”The Nifty remained volatile during the session amid the BSE F&O expiry as the index failed to break out above the falling trendline on the daily timeframe. However, the overall trend continues to remain positive, with the index sustaining above the 50-day exponential moving average. The RSI remains in a positive crossover, indicating strengthening momentum. The trend is likely to stay positive as long as the index holds above 23,800, while 24,500 remains the immediate upside target,” he said.The sharp decline in GIFT Nifty suggests domestic markets could open lower, tracking weak global cues and continued caution around richly valued technology stocks.

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