War fears have eased and crude oil prices have fallen below $88 a barrel. However, the growing Chinese challenge in artificial intelligence and weakness among semiconductor chip companies are threatening market sentiment. Asian markets have suffered steep losses.
Companies say Chinese open-source AI models are infiltrating American AI systems and copying data and computer code. The lower cost of Chinese models is also attracting more buyers than US AI systems.
At the same time, markets are questioning whether the enormous investments being made in artificial intelligence will generate adequate returns.
In derivatives trading at GIFT City, GIFT Nifty closed at 24,004.00 on Monday night. It fell to 23,980 this morning, indicating that the Indian market could open with losses.
The India Meteorological Department said the deficit in southwest monsoon rainfall stood at 16.2% as of July 27.
Under the department’s classification, rainfall that is up to 19% above or below the long-period average is considered normal.
Kerala’s rainfall deficit widened to 37.3%. Uttar Pradesh, Bihar, Punjab, Jharkhand, Gujarat, Karnataka, Telangana and Andhra Pradesh have recorded rainfall deficits of more than 20%.
Around 54% of India’s geographical area has received rainfall that is more than 20% below normal.
The ceasefire in West Asia and the decline in crude oil prices initially pushed the major US indices sharply higher on Monday. However, the fall in semiconductor stocks erased most of the gains.
Reports of data and code being stolen through open-source AI models from China are increasing. Companies are reportedly considering a joint defence strategy under Nvidia’s leadership.
Nvidia shares fell 5%, allowing Apple to regain its position as the world’s most valuable company.
Nvidia had held the top position ahead of Microsoft since June 2025. Its market capitalisation crossed $5 trillion last October before declining.
Apple’s market value reached $4.95 trillion on Monday, while Nvidia’s fell to $4.77 trillion.
Elon Musk’s SpaceX and Tesla also ended lower. SpaceX shares have fallen to around half their closing price following the company’s listing.
The Dow Jones Industrial Average gained 262.83 points, or 0.51%, to close at 52,210.08 on Monday.
The S&P 500 edged up 1.20 points, or 0.02%, to close at 7,413.18. The Nasdaq Composite declined 43.74 points, or 0.18%, to 24,932.08.
US futures are showing a mixed trend today.
Dow futures are up 71 points, or 0.14%, while S&P 500 futures have gained 17 points, or 0.22%.
Nasdaq futures are down 170 points, or 0.60%.
In the American Depositary Receipt market in New York, HDFC Bank declined 0.04% during regular trading on Monday and remained unchanged in after-hours trade at $23.22.
ICICI Bank gained 1.29% during regular trading and remained unchanged in after-hours trade at $29.89.
Infosys surged 5.31% during the regular session before declining 1.71% in after-hours trading to close at $11.50.
Wipro gained 3.16% during regular trading and slipped 0.52% in after-hours trade to $1.90.
European markets rose on Monday, mainly because crude oil prices continued to decline.
Asian markets are suffering steep losses today.
South Korea’s Kospi fell 7.5% as the rout in semiconductor companies continued following declines in US chip stocks on Monday.
South Korean chipmaker SK Hynix plunged 11% in morning trading, while Samsung Electronics fell 9%.
Over the past month, SK Hynix has lost 38%, while Samsung has declined 28%.
Japan’s Nikkei fell 4.5%, while Taiwan’s benchmark index declined 4%.
Australia’s index slipped marginally. Hong Kong opened slightly lower, while Shanghai fell 0.50%.
The Indian market recovered strongly on Monday after declining throughout the previous week because of rising crude oil prices.
The Nifty, which had lost 2.3% last week, gained close to 1% on Monday.
All major sectoral indices advanced. Information technology, media, real estate, tourism, pharmaceuticals, automobiles and healthcare were among the leading gainers.
The mid-cap and small-cap indices rose by more than 1%.
Foreign investors continued selling, recording net sales of ₹1,688.23 crore in the cash market. Domestic institutional investors were net buyers of ₹2,329.14 crore.
The Sensex gained 776.01 points, or 1.02%, to close at 76,835.78 on Monday. The Nifty rose 228.50 points, or 0.96%, to end at 23,995.95.
The Bank Nifty advanced 393.70 points, or 0.69%, to close at 57,087.20.
The Nifty Midcap 100 jumped 681.30 points, or 1.11%, to 62,303.65. The Nifty Smallcap 100 gained 247.65 points, or 1.31%, to close at 19,122.60.
A clear majority of stocks advanced in the broader market. On the BSE, 2,720 stocks rose and 1,638 declined. On the NSE, 2,248 stocks advanced while 1,058 fell.
The US Federal Reserve’s monetary policy meeting begins today, with the decision scheduled to be announced tomorrow.
Concerns about an interest rate increase have eased, but markets remain worried that the Federal Reserve could introduce measures to reduce liquidity. This has limited gold’s advance, and prices declined this morning.
After a volatile session on Monday, gold gained 0.59% to close at $4,077.60 an ounce. It fell towards $4,050 this morning.
In Kerala, the price of 22-carat gold rose by ₹680 per sovereign on Monday to ₹1,06,960.
Silver declined on Monday to close at $58.53 an ounce. It fell further to $58.26 this morning.
Platinum stood at $1,610, palladium at $1,263 and rhodium at $7,925.
International rubber prices declined by $3.60 on Monday.
In Bangkok, RSS-1 was quoted at $286.20 per quintal and RSS-3 at $282.80 per quintal.
In Kerala, RSS-4 remained at ₹28,200 per quintal.
Major industrial metals advanced on Monday.
Copper jumped 1.42% to $13,809.65 a tonne. Aluminium gained 0.63% to close at $3,180.35.
Zinc and tin also rose, while nickel and lead declined.
Cocoa prices fell 3% on Monday to $5,150.90 a tonne.
The International Cocoa Organization expects production in Indonesia to increase despite the El Niño weather phenomenon. Production in West Africa is expected to decline.
Arabica coffee rose 2.89% to $3.23 a pound. Coffee inventories remain at their lowest level since March 2024.
The US Dollar Index rose to close at 101.54 on Monday. It slipped to 101.50 this morning.
The euro fell to $1.1374, while the pound declined to $1.3294.
The Japanese yen weakened to 163.73 against the dollar. The Chinese yuan remained at 6.77 to the dollar.
The yield on the US 10-year Treasury note declined to 4.637% this morning.
The Indian rupee recorded strong gains on Monday and reached its highest level in two months.
The dollar fell by 65 paise to close at ₹95.91.
The decline in crude oil prices and inflows of more than $32 billion into Foreign Currency Non-Resident Bank, or FCNR(B), deposits supported the rupee.
In the offshore non-deliverable forward market, the dollar was quoted at ₹95.89 this morning. The Chinese yuan stood at ₹14.18 and the euro at ₹109.10.
Crude oil prices continued to decline.
There have been no attacks in the Strait of Hormuz for the past three days, while no new attacks have been reported in the Red Sea.
Azerbaijan has also resumed oil exports after a one-week disruption.
Brent crude fell 10% on Monday to close at $88.36 a barrel. It declined further to $87.51 this morning.
West Texas Intermediate crude fell to $81.69 a barrel.
Cryptocurrencies are falling again.
Bitcoin dropped below $63,225 this morning. Ether fell below $1,875, while Solana slipped below $73.50.