Indian Shares Seen Muted As Global Tech-selloff Intensifies

(RTTNews) - Indian shares are likely to open on a muted note Wednesday, mirroring weak cues from global markets as investors react to a fundamental shift in the AI and earnings narrative.

A wave of selling across global technology stocks has intensified fears that the artificial intelligence spending boom may not deliver the returns investors had anticipated.

Micron's earnings, due later today after the U.S. closing bell, will be a key test for AI-driven memory demand.

On the geopolitical front, the U.S.-Iran peace agreement helped ease regional tensions, but disputes persist over whether Tehran had agreed to allow U.N. inspections of its nuclear sites.

U.S. President Donald Trump and Iran are offering conflicting accounts of their fragile peace deal, raising doubts about its viability.

Trump has said that Iran had agreed to nuclear inspections into "infinity," but Tehran said it had made no such concessions in negotiations.

The initial peace agreement between Washinton and Tehran has allowed traffic to flow again through the Strait of Hormuz, but Iran's chief negotiator and parliamentary speaker, Mohammad Bagher Ghalibaf, has made it clear that the vital waterway, which typically handles one-fifth of global energy supply, will "never return to what it was before the war." Iran has never trusted the Americans and never will, he added.

U.S. Secretary of State Marco Rubio said Tuesday that no country is allowed to charge tolls in the Strait of Hormuz as part of any final agreement.

At the same time, Iran and Oman said they would examine charges for what they called maritime service fees in the Strait of Hormuz through a joint working group.

The two countries also remain at odds over frozen assets and Israel's parallel war against Iran-backed Hezbollah in Lebanon.

Benchmark indexes Sensex and Nifty fell more than 1 percent each on Tuesday on the back of weak global cues and disappointing PMI data.

The rupee weakened by six paise to close at 94.73 against the dollar as the dollar index surged to a one-year high in international markets in anticipation of a Federal Reserve rate hike this year.

Foreign institutional investors bought shares worth Rs 18 crore on Tuesday, while domestic financial institutions net bought shares to the extent of Rs 680 crore, according to provisional exchange data.

Asian markets were mixed in lackluster trade this morning after risk-off sentiment swept Wall Street overnight amid deepening concerns over the sustainability of massive artificial intelligence spending by major tech companies.

The dollar index was marginally higher, reaching a 13-month high on Fed rate hike bets, while gold extended losses to trade below $4,100 an ounce.

Oil extended this week's losses to trade near four-month lows, with Brent crude futures falling below $77 a barrel.

Overnight, U.S. stocks ended mostly lower as a sell-off in high-flying chip and other tech stocks extended into a second day on expectations of Fed rate hikes later this year and concerns over frothy artificial intelligence valuations.

The tech-heavy Nasdaq Composite plunged 2.2 percent, the S&P 500 gave up 1.4 percent and the narrower Dow ended marginally lower.

European stocks ended lower on Tuesday amid skepticism over spending in AI infrastructure, mixed signals from talks between Washinton and Tehran on ending the conflict, and investor anxiety over "higher-for-longer" interest rates.

The pan-European STOXX 600 dropped 0.7 percent. The German DAX lost 1 percent, France's CAC 40 shed 0.7 percent and the U.K.'s FTSE 100 finished marginally lower.