Indian benchmarks Sensex and Nifty closed higher today, showing resilience despite a 2.44% drop in Nasdaq futures. The decline followed weak quarterly results from Intel and Amazon, which sparked fears about the returns on massive AI investments. Investors are watching to see if global technology volatility will eventually impact domestic sentiment.
Indian equity markets demonstrated a surprising decoupling from global trends on Friday, with the Sensex and Nifty finishing the session in positive territory. This resilience comes despite a sharp 2.44% drop in Nasdaq futures, which were dragged down by a wave of selling across major United States technology companies. The contrast highlights a shift in investor focus, where local domestic demand is currently taking precedence over international tech volatility.
Earnings Misses Trigger US Tech Slide
The selloff in the United States was largely driven by disappointing quarterly results from industry leaders. Intel shares plummeted nearly 25% in premarket trading after the company reported figures that missed expectations. Similarly, Amazon shares fell about 7.4% as investors reacted to concerns regarding growth in its core operations. This follows recent negative sentiment surrounding Alphabet, leading to a broader debate about whether the massive spending on artificial intelligence infrastructure is actually generating the expected profits for these companies.
Broad Correction Across Hardware and AI Supply Chain
The negative momentum was not limited to software giants; it spread quickly to hardware and infrastructure providers, which had previously been beneficiaries of the AI rally. Companies such as Advanced Micro Devices, Nvidia, and Super Micro Computer saw declines of 7%, 2.8%, and 5% respectively. This indicates a correction that is reaching deep into the AI supply chain, as market participants reassess the valuation of firms tied to high-growth technology spending.
Indian Markets Hold Ground
While global indices in Japan and South Korea mirrored the bearish sentiment, Indian markets remained firm. The Sensex gained 308.49 points to close at 74,459.53, while the Nifty rose 116.35 points to finish at 23,053.10. The Indian market structure, which relies heavily on sectors like banking, consumption, and manufacturing, currently offers a different risk profile compared to the US markets, which are heavily weighted toward large technology firms.
Investors should keep an eye on whether this US tech volatility persists and eventually influences the Indian IT services sector. While Indian IT firms have different business models compared to US hardware and AI-chip makers, global spending trends and client budgets remain the most important monitorables for the coming quarters. Any sustained weakness in international client spending could impact growth projections for domestic technology companies.