Nifty, Sensex Slump as Middle East Tensions, Tech Sell-Off Spook Markets

Benchmark indices opened in the red, reflecting cautious sentiment among investors. The Nifty 50 index opened at 25,675.05, slipping by 52.50 points or 0.20 per cent, while the BSE Sensex opened at 83,252.06, declining sharply by 487.07 points or 0.58 per cent.

Market experts attributed the weak opening to heightened global volatility.

Ajay Bagga, Banking and Market Expert, told ANI, "Global markets are waking up to a highly volatile environment. While a historic trade breakthrough between India and the US initially buoyed sentiment, a sudden escalation in Middle East tensions and a sharp technical sell-off in US 'Big Tech' have clouded the outlook for Asian trading this morning. While the global tech drag might cause a flat or slightly negative start, the underlying sentiment in India remains bullish due to the US trade deal. Look for continued strength in export-oriented sectors like Pharma and Textiles."

Technology stocks remained under significant pressure globally during the morning trade.

The weakness was driven by two major factors. First, concerns escalated after the release of a new automation tool by Anthropic, which investors fear could cannibalize the core business models of established software companies. This led to a sharp 4 per cent slump in the US software sector on Tuesday.

Second, after market hours, Advanced Micro Devices (AMD) issued a disappointing revenue forecast, raising concerns that the strong demand for AI chips may be approaching a plateau. This development dragged down Asian chipmakers, particularly in Tokyo and Seoul.

Geopolitical tensions further weighed on sentiment as the United States shot down an Iranian drone that was reportedly approaching a US aircraft carrier in the Persian Gulf. This incident was accompanied by reports of Iranian armed boats harassing a US-flagged vessel in the Strait of Hormuz.

The escalation had an immediate impact on crude oil prices, with Brent crude jumping nearly 2 per cent and climbing toward the $68 per barrel mark, as markets priced in potential disruptions at one of the world's most critical energy transit routes.

In the broader market on the NSE, the Nifty 100 index was down by 0.16 per cent, while the Nifty Midcap 100 slipped 0.11 per cent. The Nifty Smallcap 100, however, managed to stay marginally positive, rising by 0.03 per cent.

Sectorally, mixed trends were visible. Nifty Auto gained 0.24 per cent, Nifty FMCG was up 0.26 per cent, and Nifty Metal rose 0.56 per cent. In contrast, IT stocks faced heavy selling pressure, with the Nifty IT index plunging 3.75 per cent.

Meanwhile, safe-haven assets saw strong buying interest. Gold prices surged by 3 per cent to Rs 1,58,400 per 10 grams for 24-carat gold, while silver prices jumped 4 per cent to Rs 2,78,735 per kilogram on Wednesday.

- ANI