The BSE Sensex opened 487 points lower, or 0.5%, to 83,252, while the Nifty 50 declined 52 points, or 0.2%, to start the day at 25,675. The two, however, pared losses to trade flat following the weak open.
On the 30-stock Sensex, HCL Tech, TCS, Infosys, and Tech Mahindra tumbled nearly 6% each. On the gainers’ side, Reliance Industries, ICICI Bank, M&M, Power Grid, Broader and L&T gained in the range of 1-2%.
The Nifty Smallcap 100 index bucked the trend to trade 0.4% higher. The Midcap 100 was also resilient, little changed from yesterday’s close.
Expert Views
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the rally triggered by the India–US trade deal may struggle to sustain. He noted that the sharp sell-off in US IT stocks is likely to spill over into Indian IT shares, limiting further upside for the broader market. With valuations remaining elevated, Vijayakumar said there is little fundamental support for a prolonged rally.
He added that the upcoming monetary policy decision on February 6 is unlikely to act as a trigger, as the MPC is expected to keep rates and stance unchanged, albeit with a dovish tone.
He highlighted that yesterday’s 639-point market rally was largely driven by FII short covering and net buying of Rs 5,236 crore in the cash market. Given current valuations, he cautioned that the bullish momentum could fade. He advised investors to focus on fairly valued large-cap stocks, while noting that sectors benefiting from exports to the US—such as textiles and apparel, gems and jewellery, and marine processing—could see further price action.FII/DII Tracker
Foreign investors staged a strong comeback in Indian equities on Tuesday, snapping a prolonged selling streak after the India–US trade deal helped remove a major overhang on markets. Foreign institutional investors (FIIs) were net buyers to the tune of Rs 5,236 crore, as per provisional NSE data, marking the highest single-day inflow since October 28. Domestic institutional investors (DIIs) also supported the rally, purchasing shares worth around Rs 1,014 crore.
The sharp inflows followed a positive market reaction to the announcement that the US has reduced tariffs on Indian goods to 18% from as high as 50%. The move eased concerns that had weighed on Indian equities, the rupee and bond markets for several months.
Global Markets
US markets also reflected the broader tech-led weakness. The S&P 500 slipped 0.84% to close at 6,917.81, while the Nasdaq fell 1.43% to 23,255.19. The Dow Jones Industrial Average was comparatively resilient, ending 0.34% lower at 49,240.99. Among individual stocks, AI heavyweights Nvidia and Microsoft slid nearly 3% each. Alphabet dropped 1.2% ahead of its earnings report on Wednesday, while Amazon declined 1.8% ahead of its results due on Thursday.
Most Asian equities slipped on Wednesday after a technology-led sell-off weighed on US benchmarks and triggered a rotation into economically sensitive sectors. Japanese and Australian stocks opened lower, while Hong Kong futures also pointed to losses. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2%, while Japan’s Nikkei fell 1.23%, tracking sharp declines in US and European equities amid concerns that rapid advances in artificial intelligence could disrupt traditional software businesses.
Crude Impact
In the oil market, Brent crude futures rose 1% to $68.03 a barrel while U.S. crude advanced 1.1% to $63.90 per barrel as recent events stoked concerns that talks aimed at de-escalating U.S.-Iran tensions could be disrupted.
In the international market, spot gold climbed 2.2% to $5,044.74 per ounce after surging 5.9% on Tuesday — its biggest single-day gain since November 2008. Spot silver rose 2.1% to $86.92 an ounce, after touching a record high of $121.64 on Thursday.
Rupee vs Dollar
The Indian rupee opened 0.2% lower at 90.43 per US dollar on Wednesday, after closing at 90.2650 in the previous session — its best single-day performance since December 2018.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)