The AI crash in the US is finally hitting home: the projected 80-point gap down for the Nifty this morning forces traders to decide instantly whether domestic DII strength can overcome the most significant tech liquidation we have seen in weeks
Good morning, I'm Prem, and this is News That Move Markets, your sharp, three-minute blast of actionable intelligence to dominate the Monday trading session.
The global handover is dominated by a major risk-off event, stemming almost entirely from the US technology sector. On Friday, the S&P 500 plunged 1.1% to 6827.41, and the technology-heavy Nasdaq Composite dropped a significant 1.7% to 23195, recording its worst day in three weeks. This pain was concentrated in the AI infrastructure trade, where the Philadelphia Semiconductor Index, our proxy for the chip supply chain, plummeted a massive 5.1%. This wipeout was triggered by corporate anxiety around colossal CapEx plans, specifically from Oracle, coupled with concerns about data center delays.
Asian markets this morning are showing weakness, reacting directly to Wall Street's tech fear. The Nikkei 225 is currently down 1.2% at 50226 points, ahead of the Bank of Japan meeting this week. Meanwhile, the Hang Seng Index is trading lower at 25734, representing a 242-point drop, reversing some of the previous session’s momentum.
Crucially, the Gift Nifty is signaling a significant gap down at the open. Compared to Friday’s closing figure of 26137, the current price hovering around 26050 indicates an approximate 80-point negative start for the domestic market. This confirms that the severe US tech shock is translating directly into opening weakness here.
However, remember the structural firewall underpinning our market: Domestic Institutional Investors, or DIIs. On Friday, FIIs sold assets worth ₹1114 Crores, but DIIs countered this aggressively, logging a formidable net buy figure of ₹3868 Crores into the cash market. This 3.5-times absorption rate ensures a powerful structural floor beneath any initial technical selling pressure.
The mandate for India Inc. is shifting rapidly. Geopolitical instability remains the single biggest future risk for nearly 50% of Indian CXOs. This fear is met by a powerful opportunity: new intelligence reveals an untapped export potential exceeding $35 billion in the Russian market alone, primarily in Pharmaceuticals and Engineering goods. This macro news provides a clear, fundamental counter-trade to the tech panic.
For traders, the action is defined by rotation. You must keep technology on a technical short or hedge radar immediately at the open, given the massive 5.1% Semiconductor Index collapse and its direct correlation to contracting US client sentiment. Conversely, look to accumulate strong domestic financials. HDFC Bank’s US ADR closed positively at +0.75%, and ICICI Bank also showed resilience, closing up +0.13%. This positive bias confirms global confidence in Indian banks as defensive, domestic growth plays.
In commodity space, Brent crude is holding steady at a comfortable low level of $61.38 per barrel, easing fiscal and inflationary stress. This stable energy environment minimizes risk for the broader economy. Bitcoin is showing strength in the $88025 to $90496 range, confirming that capital is rotating within the global risk complex, rather than exiting it entirely.
Today requires highly selective trading: short or hedge the IT sector as a tactical move, but deploy that capital immediately into the structural strength of domestic banking, engineering, and pharmaceutical exporters. The Nifty must hold the crucial psychological support near 26050. If DII conviction holds this line, infrastructure and banking stocks will lead the bounce back. Trade with conviction, this Prem signing off.