Sensex, Nifty Open Higher Despite Global Chip Selloff; IT Stocks Stay in Focus

Stock Market Today: Sensex, Nifty Open Higher as IT Stocks Extend Rally; Asian Tech Selloff Weighs on Sentiment

Indian benchmark indices opened in positive territory on Tuesday, supported by strong buying in information technology (IT) stocks, even as a sharp selloff in Asian semiconductor shares kept global market sentiment cautious.

At around 9:20 am, the BSE Sensex was up 111.92 points (0.15%) at 76,947.70, while the Nifty 50 gained 42.80 points (0.18%) to trade at 24,038.75.

IT Stocks Continue to Outperform

The IT sector extended Monday’s rally, emerging as the biggest gainer in early trade. The Nifty IT index jumped 2.48%, led by:

• TCS: +2.78%
• Infosys: +2.54%
• Tech Mahindra: +2.23%
• HCL Technologies: +1.67%

FMCG stocks also remained in demand, with the Nifty FMCG index rising 0.62%, while Realty and Media shares traded in the green.

In contrast, profit booking was visible in PSU Banks, Oil & Gas, Metals and Auto stocks. The Bank Nifty slipped 0.08% to 57,043.95, reflecting mixed sentiment in the financial sector.

• Broader Markets Stay Muted
• The broader market underperformed the benchmark indices.

The Nifty Midcap 100 traded largely flat, while the Nifty Smallcap 100 edged 0.08% lower, indicating selective buying rather than a broad-based market rally.

Analysts See Positive Domestic Triggers

According to V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, several domestic factors could help sustain the market’s recovery, although intermittent profit booking remains likely.

He highlighted four key positives:

Brent crude has corrected sharply to around $87 per barrel, improving India’s macroeconomic outlook.

Improved monsoon progress has reduced the rainfall deficit to 15.4%, supporting expectations for rural demand.

First-quarter corporate earnings have shown signs of recovery, with the trend expected to continue in the coming quarters.

Credit growth remains robust at around 18%, backed by healthy demand in sectors such as automobiles.

Vijayakumar also noted that the ongoing weakness in the global semiconductor trade could benefit India by reducing inflationary pressures linked to technology imports.

Asian Markets Tumble on Chip Stock Selloff

Asian equities witnessed heavy selling after semiconductor stocks came under pressure amid concerns over the massive investments required to sustain the global artificial intelligence boom.

South Korea’s Kospi plunged more than 8%, triggering a circuit breaker, while Japan’s Nikkei 225 fell about 4% after overnight weakness in US chipmakers.

The decline followed reports that Nvidia is discussing nearly $250 billion in financing guarantees for OpenAI’s data centre expansion, raising fresh questions about AI-related capital expenditure.

Among the biggest losers were SK Hynix, which fell nearly 11%, Samsung Electronics, down over 9%, along with Japanese chip-related companies such as Tokyo Electron and Kioxia.

Crude Oil Continues to Ease

Oil prices extended losses after Monday’s sharp decline, as easing tensions between the United States and Iran reduced concerns over potential supply disruptions.

Lower crude prices are generally viewed as positive for India, one of the world’s largest oil importers, although investors remain cautious ahead of key central bank meetings this week, including the US Federal Reserve’s policy decision.

Technical Outlook

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said Monday’s sharp rebound has improved near-term market sentiment after the Nifty gained 228 points and the Sensex advanced 776 points.

He said the benchmark indices formed a bullish candlestick pattern, suggesting that the ongoing pullback could continue as long as the Nifty remains above 23,800 and the Sensex holds above 76,300.

According to Chouhan, the next upside target for the Nifty lies in the 24,100-24,150 range, while the Sensex could move towards 77,000-77,300.

However, a sustained break below 23,800 on the Nifty could trigger fresh selling pressure, potentially dragging the index towards 23,700-23,600.

He advised investors to use any rally towards the 24,100-24,200 zone to trim weaker long positions, while considering selective fresh buying on declines towards the 23,800-23,700 support area.