Asian Markets Trade Cautiously After Wall Street Slide; Weak Global Cues Signal Lower Start For Sensex, Nifty

Mumbai, July 8: Indian equity benchmarks are likely to open on a negative note on Wednesday, tracking mixed Asian markets and overnight losses on Wall Street, as investors remained cautious over the outlook for artificial intelligence (AI)-driven technology stocks and rising geopolitical tensions in the Middle East.

Sentiment was also dented by a sharp jump in crude oil prices after the United States launched military strikes against Iran, raising concerns over potential disruptions to global energy supplies. Higher oil prices are typically viewed as a negative for India, one of the world’s largest crude importers, as they can widen the current account deficit and stoke inflationary pressures.

Asian markets mixed as chip stocks under pressure

Japan’s Nikkei 225 (down 0.7%), Hong Kong’s Hang Seng (up 2%), MSCI Asia Pacific ex Japan (up 0.6%) were mixed while South Korea’s Kospi went down 2.2% amid weakness in semiconductor stocks.
Technology shares remained in focus after Samsung Electronics reported record quarterly profit, but the earnings failed to alleviate concerns over lofty valuations in AI-linked semiconductor stocks. Samsung and SK Hynix declined in Seoul, extending weakness across the broader chipmaking sector.
Investors are increasingly questioning whether the explosive AI-led rally in global technology stocks can be sustained, especially amid elevated valuations and expectations of slower earnings growth.

Wall Street ends lower on AI concerns

US stocks closed lower overnight as semiconductor companies extended their recent decline, dragging the technology-heavy Nasdaq lower.

The Nasdaq Composite was the worst-performing of the three major US indices, while the S&P 500 and the Dow Jones Industrial Average also finished in negative territory.

Chipmakers including Micron Technology and others came under selling pressure as investors continued to rotate out of richly valued AI-related stocks. Market participants also remained cautious ahead of the start of the second-quarter earnings season, which is expected to provide fresh clues on corporate profitability and the health of the US economy.

European markets slip

European shares slipped on Tuesday weighed down by losses in technology stocks.
Defence names remained in focus ahead of key NATO discussions on military spending, while investors also monitored developments in the Middle East. Technology stocks, however, mirrored the weakness seen on Wall Street as concerns over AI-related valuations continued to weigh on sentiment.

Oil surge adds to market jitters

Crude oil prices jumped after the US carried out military strikes against Iran following attacks on commercial vessels near the Strait of Hormuz, one of the world’s most important oil shipping routes.
The escalation renewed fears of supply disruptions, sending Brent crude higher and adding another layer of uncertainty for global financial markets. Rising crude prices could pressure inflation and corporate margins, particularly in oil-importing economies such as India.

Weak global cues point to lower opening

The combination of persistent selling in technology stocks and higher crude oil prices is expected to keep domestic investors on the edge at the opening bell.
Market participants will also keep an eye on institutional fund flows, crude oil prices and any further geopolitical developments, which are likely to determine the market’s direction through the day.

Source: Exchanges