Concerns over the massive debt being accumulated by artificial intelligence companies have returned to unsettle global financial markets. The Nasdaq plunged nearly 2% on Wednesday, triggering a sharp sell-off in Asian technology and semiconductor stocks on Thursday morning.
South Korean and Japanese equities suffered steep losses, while Chinese markets also slipped. Crude oil prices retreated towards $104 a barrel after Wednesday's gains. Gold, which had fallen sharply following higher US inflation data, recovered in early Thursday trading.
The GIFT Nifty, which closed at 22,545 on Wednesday night, fluctuated between 22,525 and 22,642 on Thursday morning, indicating a weak opening for Indian equities.
India's wholesale price inflation rose to 11.39% in September from 9.92% in August. Inflation across major categories remained elevated. Fuel and power inflation reached 25.9%, while inflation in manufactured products increased to 9.8% from 8.4% in August. Food inflation stood at 8.7%.
India's September export and import data are scheduled for release on Thursday.
Meanwhile, US consumer price inflation accelerated to 3.7% in September from 3.4% in August, driven largely by higher fuel prices.
The stronger inflation reading initially raised expectations that the US Federal Reserve could increase interest rates later this month. However, market sentiment subsequently shifted towards the possibility of a rate hike in December.
Markets are currently pricing in a 60% probability of unchanged rates this month and a 57% probability of an increase in December.
Gold prices, which initially dropped nearly 2% following the inflation report, subsequently recovered.
US producer price inflation, weekly jobless claims and retail sales data are also scheduled for release on Thursday. These indicators could influence expectations about the Federal Reserve's next policy decision.
US equities ended Wednesday lower as rising consumer inflation and renewed concerns over technology companies' debt weighed on investor sentiment.
Shares of CoreWeave plunged 15%, while Oracle declined 9% amid concerns over the growing financial commitments associated with artificial intelligence infrastructure.
Bank of America lost 5% after its third-quarter earnings fell short of market expectations.
Dow Jones: 51,621.48, down 48.62 points (0.09%)
S&P 500: 7,718.94, down 86.51 points (1.11%)
Nasdaq Composite: 26,692.87, down 511.51 points (1.88%)
US stock futures were largely negative on Thursday morning.
Dow Jones futures gained 21 points (0.04%), while S&P 500 futures declined 28 points (0.36%). Nasdaq futures fell 300 points (1%).
Indian companies listed through American Depositary Receipts (ADRs) showed a mixed trend during regular trading on Wednesday but weakened in extended trading.
HDFC Bank fell 0.57% during regular trading and declined another 0.31% in extended trading to $22.56.
ICICI Bank lost 0.95% during regular trading and a further 0.96% in extended trading to $28.
Infosys gained 0.70% during regular trading before slipping 0.44% in extended trading to $11.43.
Wipro remained unchanged during regular trading but declined 0.56% in extended trading to $1.79.
European stock markets closed higher on Wednesday, supported by gains in pharmaceutical companies. Automobile stocks, however, remained under pressure.
Asian equities came under heavy selling pressure on Thursday morning as concerns over AI-related debt and technology valuations intensified.
South Korea's Kospi plunged around 7% in early trading, taking its cumulative decline over four sessions to approximately 19%.
Semiconductor stocks were among the biggest losers. SK Hynix dropped 10%, while Samsung Electronics fell 8%. Both stocks have lost more than 20% this week.
Japan's Nikkei declined 5%, while Taiwan's market fell 3%. The Shanghai Composite dropped 1.40% and Hong Kong's Hang Seng lost 1.10%. Australia's benchmark index slipped 0.10%.
The sell-off reflects growing investor nervousness over the financial sustainability of large-scale AI investments, particularly among technology and semiconductor companies.
Indian benchmark indices closed lower on Wednesday, giving up part of the gains recorded during Tuesday's rally, which had been driven by expectations of tax relief.
The Reserve Bank of India governor's assurance that the central bank would continue taking necessary measures to support the rupee failed to lift market sentiment.
Investors remained concerned that efforts to stabilise the currency could tighten domestic liquidity.
Higher crude oil prices and the unexpectedly sharp rise in wholesale inflation to 11.39% also weighed on sentiment.
Despite the decline in benchmark indices, the broader market showed greater resilience. On the BSE, 2,520 stocks advanced against 1,865 declines. On the NSE, 2,012 stocks gained while 1,529 declined.
Foreign institutional investors continued to sell Indian equities, recording net sales of ₹1,857.44 crore in the cash market. Domestic institutional investors remained buyers, purchasing shares worth a net ₹2,670.44 crore.
Sensex: 72,781.89, down 251.89 points (0.34%)
Nifty 50: 22,622.70, down 99.25 points (0.44%)
Bank Nifty: 55,316.00, down 166.05 points (0.30%)
Nifty Midcap 100: 59,409.10, down 50.10 points (0.08%)
Nifty Smallcap 100: 19,384.80, down 62.60 points (0.32%)
The Securities and Exchange Board of India (SEBI) is scheduled to discuss the Closing Auction Session (CAS) framework with its market advisory committee on Thursday.
The mechanism, introduced in early August, has generated differing views among market participants. Domestic market representatives favour retaining the earlier closing mechanism, while foreign institutional investors have been pushing for the new system.
It remains unclear whether the regulator will consider changes to the framework. SEBI has also proposed reforms to the SME platform used by small and medium enterprises to raise capital through initial public offerings.
Canadian investor Prem Watsa's Fairfax Financial is set to acquire a 60.72% stake in IDBI Bank from the Central government and Life Insurance Corporation of India (LIC).
The proposed transaction values the shares at ₹81 apiece. The government and LIC will together retain approximately 34% in the bank.
Fairfax already holds a 40% stake in Thrissur-based CSB Bank. Under the proposed arrangement, Fairfax will have to either merge CSB Bank with IDBI Bank or divest its CSB Bank holding within two years.
Fairfax also has significant investments in two financial companies belonging to the IIFL Group. The IDBI Bank transaction is expected to generate ₹26,500 crore for the Central government and ₹26,300 crore for LIC.
With this, the government's total disinvestment proceeds for the financial year are projected to reach ₹90,000 crore, exceeding the budget target of ₹80,000 crore.
IDBI Bank shares surged 8.33% on Wednesday to ₹89.85, while CSB Bank gained 5.49%.
Reliance Group's Jio Platforms is expected to launch its initial public offering on October 21.
The proposed IPO aims to raise more than ₹30,000 crore, potentially making it India's largest public issue.
Existing major global investors are not expected to sell their holdings. The proceeds are intended to reduce debt.
Some brokerages believe the listing could generate an upside of more than 45% for Reliance Industries shares.
HDB Financial Services reported a 15.5% increase in interest income for the third quarter. Net profit rose 34%.
Tata Technologies reported a 22% increase in third-quarter revenue. However, net profit declined 5%.
Bajaj Consumer Care reported a 25.7% increase in third-quarter revenue, while net profit jumped 67.1%.
Its profit margin improved to 24.7% from 18.1%.
Mangalore Refinery and Petrochemicals Ltd (MRPL) reported a 37.1% increase in third-quarter revenue. Net profit nearly tripled to ₹1,881 crore from ₹639 crore.
Gold prices recovered on Thursday morning after a sharp decline in the previous session. The initial sell-off followed stronger-than-expected US consumer inflation, which raised concerns about a possible Federal Reserve rate hike this month.
However, expectations subsequently shifted towards a December increase, helping gold regain lost ground.
International gold prices closed Wednesday at $4,106.50 an ounce, down $55.60 or 1.34%. The metal had earlier fallen to $4,072 before recovering.
On Thursday morning, gold climbed nearly 1% to around $4,150 an ounce before fluctuating.
In Kerala, the price of 22-carat gold declined by ₹760 per sovereign on Wednesday to ₹1,08,720. The price per gram stood at ₹13,590.
Silver had fallen nearly 6% to $55.76 an ounce before recovering to around $56.20 on Thursday morning.
Platinum was quoted at $1,605, palladium at $1,086 and rhodium at $8,850.
Rubber prices moved in opposite directions in international and domestic markets.
While international rubber prices declined, prices continued to rise in Kerala due to a shortage of rubber sheets.
In Bangkok, RSS 1 rubber was quoted at $295.80 per quintal, while RSS 3 stood at $292.30.
In Kerala, RSS 4 rubber increased to ₹28,600 per quintal on Wednesday.
Cocoa prices declined to $5,728 a tonne.
Arabica coffee increased 1.38% to $2.9675 a pound.
Palm oil gained 0.38% to 4,700 Malaysian ringgit a tonne.
Industrial metal prices showed a mixed trend on Wednesday.
Copper rose marginally by 0.06% to $14,750.35 a tonne, while aluminium declined 1.91% to $2,979.80 a tonne.
Nickel, lead and tin gained, while zinc moved lower.
The US dollar index witnessed significant volatility on Wednesday. After climbing close to 103, the index retreated to close at 102.55. It weakened further to 102.13 on Thursday morning.
The euro recovered to $1.194 after falling to $1.1149, while the British pound traded at $1.323.
The Japanese yen stood at 157.88 against the dollar, while the Chinese yuan was quoted at 6.69 per dollar.
US government bond yields also declined. The benchmark 10-year Treasury yield slipped to 5.139% on Thursday morning, suggesting that concerns over an immediate Federal Reserve rate hike had eased. The 30-year Treasury yield declined to 5.491%. European bond yields also moved lower.
The Indian rupee continued its recovery on Wednesday, supported by measures taken by the Reserve Bank of India. The currency has appreciated by approximately 2% over three trading sessions.
The dollar weakened to ₹94.75 during Wednesday's session before recovering to close at ₹95.15, a decline of 13 paise. In offshore forward trading on Thursday morning, the dollar was quoted at ₹95.08.
The sharp decline in the US dollar index could provide further support to the rupee.
The Chinese yuan was quoted at ₹14.22, while the euro slipped marginally to ₹106.56.
Crude oil prices fell sharply on Thursday morning after advancing during Wednesday's session.
Brent crude, which closed Wednesday at $106.06 a barrel, declined around 2% to $104.03 in early trading. West Texas Intermediate (WTI) crude was quoted at $93.70 a barrel.
The decline came despite US crude reserves falling to record lows.
Cryptocurrency prices continued to weaken on Thursday morning.
Bitcoin fell below $81,500, while Ether slipped below $2,400. Solana declined below $104.
The renewed decline comes amid broader weakness in risk-sensitive global assets.
(Wednesday, October 14)
Sensex: 72,781.89 | -0.34%
Nifty 50: 22,622.70 | -0.44%
Bank Nifty: 55,316.00 | -0.30%
Nifty Midcap 100: 59,409.10 | -0.08%
Nifty Smallcap 100: 19,384.80 | -0.32%
Dow Jones: 51,621.48 | -0.09%
S&P 500: 7,718.94 | -1.11%
Nasdaq Composite: 26,692.87 | -1.88%
US dollar: ₹95.15 | -₹0.13
International gold (per ounce): $4,106.50 | -$55.60
Kerala gold (per sovereign): ₹1,08,720 | -₹760
Brent crude (per barrel): $106.06 | +$0.37
