Indian Shares Seen Lower Amid Global Tech Sell-off

(RTTNews) - Indian shares may open on a sluggish note on Friday after recent strong gains. A cautious undertone may prevail, with information technology stocks likely to remain in focus amid an ongoing heavy sell-off in global companies exposed to AI data centers, including crucial chipmakers and semiconductor manufacturers.

American Depository Receipts of Infosys jumped 4.6 percent overnight despite a Wall Street rout wiping out roughly $2.5 billion in market value on concerns over tech valuations and whether substantial AI spending can generate sufficient returns.

Benchmark indexes Sensex and Nifty soared 2.6 percent and 2.4 percent, respectively on Thursday to extend gains for a sixth consecutive session as softening crude oil prices helped ease inflation concerns.

The rupee appreciated by 18 paise to close at 94.47 against the U.S. dollar, extending gains for a fifth straight session and reaching a two-month high on renewed foreign fund inflows.

Foreign institutional investors (FIIs) net bought shares worth Rs. 14,974.68 crore on Thursday, marking their biggest single-day net purchase in more than a year, while domestic institutional investors (DIIs) net sold shares worth Rs. 10,444.54 crore, according to provisional exchange data.

Asian markets were sharply lower this morning, with South Korea's Kospi and Japan's Nikkei both tumbling around 6 percent as fears of tighter data center regulation spread.

The U.S. dollar held steady against major currencies as the yen and Swiss franc attracted safe-haven bids ahead of a closely watched U.S. jobs report, due later in the day.

U.S. government bond yields ticked lower, with the 2-year Treasury yield dropping about 10 basis points to roughly 4.47 percent. Gold prices fell 0.6 percent to $4,065 an ounce but were on course for their strongest weekly advance since August.

Brent crude futures rose about 1 percent toward $100 a barrel but were on track for a weekly loss of about 13 percent on hopes of de-escalation in the U.S.-Iran conflict and a possible reopening of the Strait of Hormuz.

On Thursday, U.S. President Trump said Iran could not do anything regarding its nuclear program without Washington's approval and that he would have to decide whether the U.S. should take further action against Tehran or accept the current situation.

U.S. stocks crashed overnight after celebrating the election result a day before on optimism that a divided Congress could limit policy shocks, temper spending and reduce some of the economic risks.

While the midterm elections helped removed uncertainty, fresh doubts have emerged over the speed at which data centers could be approved, powered and built. Adding to investor anxiety, Cleveland Federal Reserve President Beth Hammack and Richmond Fed Chief Thomas Barkin made a case for modest and steady interest-rate increases to bring inflation back to 2 percent.

The Nasdaq Composite nosedived 5.5 percent, marking its largest single-day drop in 19 months and confirming a technical correction on concerns about whether the huge amounts being spent on AI will pay off.

The S&P 500 plummeted 4.4 percent to mark its worst performance since the April 2025 tariff meltdown as Texas governor-elect Gina Hinojosa called for a longer data center moratorium in the state, followed by tighter regulation. The narrower Dow tumbled 3.4 percent.

European stocks reversed course to end mostly lower on Thursday as AI spending worries intensified and the Bank of England raised its key interest rate for the first time since 2023.

The pan-European STOXX 600 fell 0.4 percent. While France's CAC 40 edged up 0.3 percent, the German DAX and the U.K.'s FTSE 100 dropped around 0.4 percent each.