Global equity markets came under renewed pressure on Friday, October 30, as disappointing earnings and concerns over heavy artificial intelligence (AI) investments weighed on technology stocks. Results from Amazon and Intel, following Alphabet's disappointing performance, triggered a sell-off in US stock futures, with Nasdaq futures falling more than 2%.
Asian markets also declined sharply on Friday morning. Meanwhile, Brent crude oil approached $118 a barrel, raising fresh concerns over inflation, interest rates and the economic outlook.
GIFT Nifty, which closed at 23,060 on Thursday night, slipped to 22,982 on Friday morning, indicating a significantly weaker opening for Indian equities.
The leadership and governance dispute within the Tata Group is becoming increasingly complicated.
Tata Trusts chairman Noel Tata has stepped down as chairman of retail company Trent Ltd after reaching the retirement age of 70 under the group's policy. Senior lawyer Berjis Desai's fellow legal professional Behram Vakil has been appointed as his successor. Reports suggest that Tata Sons chairman N Chandrasekaran was not informed about the appointment beforehand.
On November 12, Noel Tata is scheduled to relinquish five more board positions. These include the chairmanships of Voltas, Tata Investment Corporation and Tata International, and the vice-chairmanships of Tata Steel and Titan. However, he will continue as a director of Tata Sons.
Meanwhile, the Reserve Bank of India has reportedly maintained its position on the listing requirement for Tata Sons.
There are also indications that Noel Tata may legally challenge the Tata Sons board's decision to extend Chandrasekaran's tenure. He has sought relevant board records from the company secretary.
Noel has also raised concerns over alleged undisclosed business dealings between the TVS Group and a company associated with Chandrasekaran's son. He has suggested that this relationship may have influenced Tata Trusts representative Venu Srinivasan's support for Chandrasekaran.
The controversy has acquired a political dimension, with Opposition leader Rahul Gandhi alleging that the Central government is attempting to weaken the Tata Group to benefit Gautam Adani.
Earnings announcements from Amazon and Intel have intensified concerns over the profitability and sustainability of technology companies' massive AI investments.
Amazon expects capital expenditure of approximately $220 billion this year. Its free cash flow deteriorated to negative $42.4 billion in the third quarter, significantly worse than market expectations.
Amazon shares fell 7.4% in futures trading.
Intel also disappointed investors. Its third-quarter revenue declined 5%, while the company substantially lowered its fourth-quarter revenue outlook. Intel futures plunged 23%, following a 3.62% decline in Thursday's regular trading session.
Most major US technology companies, except Apple, were trading lower in pre-market activity. Nasdaq futures were down more than 1.5% earlier in the session, extending the previous day's losses.
Alphabet's disappointing results triggered a sharp technology-sector sell-off on Thursday. The Google parent's shares plunged 12.3%, wiping approximately $500 billion off its market capitalisation.
The stock declined another 1.2% in futures trading.
The decline reflects growing investor concerns over whether technology companies will generate sufficient returns from their unprecedented spending on AI infrastructure.
Enterprise software company ServiceNow also suffered a steep sell-off, with its shares plunging 27%.
Stronger US economic data offered little support to the market. US GDP expanded 3.4% in the third quarter, compared with 2.2% in the previous quarter. Capital investment grew 12.7%, while consumer spending increased 3.8%.
However, concerns over technology valuations overshadowed the encouraging economic figures.
Thursday's US market closing levels were:
Dow Jones Industrial Average fell 132.54 points, or 0.25%, to 52,342.56.
S&P 500 declined 23.59 points, or 0.30%, to 7,720.39.
Nasdaq Composite dropped 365.13 points, or 1.38%, to 26,184.72.
US stock futures remained under pressure on Friday morning as investors continued to reassess technology-sector valuations.
Dow futures declined 122 points, or 0.23%, while S&P 500 futures lost 81 points, or 1.04%. Nasdaq futures plunged 692 points, or 2.34%, indicating continued weakness in technology stocks.
Indian companies listed through American Depositary Receipts (ADRs) showed mixed movements in New York on Thursday.
HDFC Bank ADRs gained 1.16% during regular trading and finished extended trading unchanged at $21.80.
ICICI Bank rose 1.50% during regular trading and remained unchanged in extended trading at $29.13.
Infosys gained 0.91% during regular trading but declined 0.82% in extended trading to $12.10.
Wipro advanced 2.43% during the session before slipping 0.47% in extended trading to $2.10.
European stock markets ended Thursday's session with solid gains.
The European Central Bank (ECB) kept its benchmark interest rates unchanged, in line with market expectations.
ECB president Christine Lagarde also announced that she would step down in February, ahead of the completion of her tenure.
Asian equities declined sharply on Friday, following the sell-off in US technology stocks.
South Korea's Kospi index plunged 5%, while major semiconductor companies SK Hynix and Samsung Electronics fell by as much as 8%.
Japan's Nikkei declined 2.8%, while Taiwan's benchmark index lost 2.75%.
China's Shanghai Composite dropped 1.2%.
Hong Kong's Hang Seng was an exception, trading 0.50% higher.
The sell-off highlights the growing sensitivity of Asian markets, particularly semiconductor-heavy indices, to concerns over global AI spending.
Indian equities staged a strong recovery in the previous session, recouping losses suffered over three consecutive days. Renewed speculation that the government may reduce capital gains tax on equities to attract foreign investors helped lift sentiment.
Signs of easing crude oil prices and the US Federal Reserve's decision to leave interest rates unchanged also supported the rally.
All major sectoral indices, except automobiles, ended higher. Hero MotoCorp, Maruti Suzuki and Bajaj Auto weighed on the automobile index. FMCG, real estate and public sector banking stocks led the gains.
The broader market also witnessed healthy buying. On the BSE, 2,600 stocks advanced against 1,787 declines. On the NSE, 2,182 stocks gained while 1,372 declined.
Foreign institutional investors turned net sellers after two consecutive sessions of buying, selling shares worth ₹943.60 crore in the cash market on Thursday.
Domestic institutional investors provided support with net purchases of ₹1,924.41 crore.
The Sensex climbed 905.01 points, or 1.24%, to 74,151.04, while the Nifty 50 advanced 237.90 points, or 1.05%, to 22,936.75. Bank Nifty gained 642.25 points, or 1.18%, to 54,909.65.
The Nifty Midcap 100 rose 566.95 points, or 0.99%, to 57,841.65, while the Nifty Smallcap 100 advanced 176.45 points, or 0.95%, to 18,811.35.
Gold prices remained under pressure amid growing expectations of another US interest rate increase. The precious metal slipped below $4,000 an ounce in early trading on Friday, reviving concerns over its near-term outlook.
Gold had earlier fallen to $3,994 last week and $3,975 in July. Investors are now watching whether these levels will provide support.
The market expects the US Federal Reserve to raise interest rates again in December.
Stronger-than-expected US GDP growth of 3.4% has weakened expectations that the interest rate tightening cycle may be nearing its end.
Higher interest rates tend to make interest-bearing assets such as government bonds more attractive than gold.
Gold declined $46.10, or 1.13%, to close at $4,022.50 an ounce on Thursday. In Friday's early trading, the metal briefly slipped below $4,000 before recovering to around $4,006.
In Kerala, the price of 22-carat gold remained unchanged at ₹1,05,560 per sovereign on Thursday. A significant decline was expected on Friday.
Silver also continued its downward movement. The metal fell 3.35% to $52.29 an ounce on Thursday and declined another 1.33% to $51.62 in early Friday trading.
Other precious metal prices were:
Platinum: $1,464
Palladium: $972
Rhodium: $8,550
Rubber prices continued to strengthen in Kerala even as international prices weakened. In Bangkok, RSS-1 rubber declined to $285.50 per quintal, while RSS-3 slipped to $282.10.
In Kerala, RSS-4 rubber increased to ₹29,700 per quintal, reflecting the divergence between domestic and overseas markets.
Most industrial metals ended lower on Thursday, with zinc being the notable exception. Copper declined 0.59% to $14,557.69 per tonne. Aluminium slipped 0.67% to $3,063.20 per tonne. Nickel, tin and lead also weakened, while zinc advanced.
Cocoa prices recorded a modest increase to close at $5,459.40 per tonne. Arabica coffee declined 0.45% to $2.85 per pound. Palm oil fell 0.80% to 4,627 Malaysian ringgit per tonne.
The US dollar index declined slightly on Thursday to close at 102.04. It weakened further on Friday morning, falling to 101.59.
The euro traded at $1.1195, while the British pound stood at $1.3389. The Japanese yen was quoted at 157.47 against the dollar, while the Chinese yuan strengthened to 6.66 per dollar.
The yield on the benchmark 10-year US Treasury bond eased to 4.914% on Friday morning.
The Indian rupee weakened further against the US dollar on Thursday. The dollar gained four paise to close at ₹95.26. In the overseas forward market on Friday morning, the dollar was quoted at ₹95.10.
The decline in the dollar index could provide some support to the rupee.
The Chinese yuan remained at ₹14.29, while the euro strengthened to ₹106.70.
Crude oil prices resumed their upward movement on Friday after declining in the previous session. Brent crude had fallen $0.54 to close at $114.89 a barrel on Thursday.
However, prices rebounded sharply on Friday morning to reach $117.80, approaching the psychologically important $118 level. West Texas Intermediate (WTI) crude traded at $104.84 a barrel.
The renewed increase in crude prices could add to inflationary pressures and raise concerns for oil-importing economies such as India.
Cryptocurrency markets fell sharply following reports of a security breach at Binance, one of the world's largest digital asset exchanges.
Several cryptocurrency firms reportedly suspended transactions amid the uncertainty. Bitcoin dropped around 6% on Friday morning, falling below $77,000. Ether slipped below $2,200, while Solana declined below $94.
The developments added to the broader risk-off sentiment across global financial markets.
Sensex: 74,151.04 (+1.24%)
Nifty 50: 22,936.75 (+1.05%)
Bank Nifty: 54,909.65 (+1.18%)
Nifty Midcap 100: 57,841.65 (+0.99%)
Nifty Smallcap 100: 18,811.35 (+0.95%)
Dow Jones: 52,342.56 (-0.25%)
S&P 500: 7,720.39 (-0.30%)
Nasdaq Composite: 26,184.72 (-1.38%)
US dollar: ₹95.26 (+₹0.04)
Gold (per ounce): $4,022.50 (-$46.10)
Gold (per sovereign): ₹1,05,560 (unchanged)
Brent crude (per barrel): $114.89 (-$0.54)