Indian equity markets looked set for a mildly negative start on Tuesday, with benchmark indices trading lower in the pre-open session after Monday’s rally, as investors assess global cues and institutional flows. A major selloff across tech stocks and IT indices dragged down the sentiment prevalent across the markets.
The BSE benchmark rang the opening bell near 82,900, crashing more than 350 points, while the Nifty50 tested 25,600, taking a hit of a little over 100 points, around 9:15 AM.
On the 30-share Sensex, the early gainers included Tata Steel, PowerGrid, L&T, NTPC, and SBI. On the other hand, the laggards included Infosys, HCL Tech, TCS, Eternal, and Bharti Airtel.
In the broader markets, the Nifty Microcap250 tanked 0.83 per cent. Sectorally, the IT index crashed 2.47 per cent, followed by a 1.54 per cent downfall in the Midsmall IT & Telecom index.
Notably, in the pre-open hour around 9:08 AM, the Sensex was at 83,058.68, down 235.98 points, and the Nifty stood at 25,641.80, lower by 71.20 points or 0.28 per cent, indicating a cautious opening. The subdued pre-open trend follows a firm close in the previous session, when domestic equities ended higher on improved global sentiment.
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AI Concerns Continue To Pressure Tech Counters
Analysts said the persistent weakness in technology shares reflects mounting anxiety over the long-term impact of AI adoption on traditional IT services.
“The trend of weakness in tech stocks stemming from the potential AI impact continues. The weakness in the ADRs of Indian IT companies indicates that this segment will continue to remain under pressure,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.
He added that markets will closely monitor US President Donald Trump's State of the Union address later in the day, particularly the tone and direction of his policy messaging.
Tariff Uncertainty Adds To Global Jitters
According to Vijayakumar, fresh developments on the trade front have revived uncertainty in global markets.
“The EU freezing the deal with US in the light of the tariff changes following the Supreme Court verdict and Trump's warnings to countries backing away from deals indicate that the tariff drama has more in store for economies and markets. We will have to wait and watch how this drama plays out,” he said.
The renewed tariff rhetoric has once again brought global trade risks into focus, adding to volatility across asset classes.
Global Markets Mixed, Oil Prices Climb
Asian markets presented a mixed picture in early trade. South Korea’s Kospi, China’s Shanghai SSE Composite Index and Japan’s Nikkei 225 were trading higher, while Hong Kong’s Hang Seng remained in negative territory.
Overnight, US equities ended nearly 2 per cent lower, reflecting risk aversion in global markets.
Meanwhile, Brent crude, the global oil benchmark, rose 1 per cent to USD 72.13 per barrel, adding to inflationary concerns.
Institutional Flows Provide Some Support
On the institutional front, Foreign Institutional Investors (FIIs) were net buyers on Monday, purchasing equities worth Rs 3,483.70 crore, according to exchange data. Domestic Institutional Investors (DIIs), however, turned net sellers, offloading stocks worth Rs 1,292.24 crore.
In the previous session on Monday, domestic markets had ended on a strong note. The BSE Sensex climbed 479.95 points to close at 83,294.66, while the NSE Nifty gained 141.75 points to settle at 25,713.
With IT stocks under sustained pressure, crude oil firming up and global trade tensions resurfacing, investors are likely to remain cautious as the session progresses.