GIFT Nifty:
The GIFT Nifty January 2025 futures contract is currently up 22.50 points, indicating a positive start for the Nifty 50.
Institutional Flows:
Foreign portfolio investors (FPIs) sold shares worth Rs 5,015.46 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 6,642.15 crore in the Indian equity market on 27 January 2025, provisional data showed.
According to NSDL data, FPIs have sold shares worth Rs 69492.04 crore (so far) in the secondary market during January 2025. This follows their sale of shares worth Rs 2589.63 crore in December 2024.
Global Markets:
The US Dow Jones index futures were currently down by 73 points, signaling a negative opening for US stocks today.
Asian stocks were mixed on Tuesday, following a sharp decline on Wall Street. Fears of overvalued artificial intelligence (AI) companies triggered the sell-off after a Chinese startup, DeepSeek, released a cost-effective AI model, raising concerns about the sustainability of current valuations.
Many Asian markets, including China and South Korea, were closed for the Lunar New Year holiday.
On Monday, the S&P 500 and Nasdaq 100 plummeted 1.46% and 3.07% respectively. The Dow Jones Industrial Average, however, gained 0.65%, reaching a one-month high.
The US dollar strengthened against all Group-of-10 currencies after the President announced plans to impose tariffs on foreign-produced semiconductors, pharmaceuticals, and certain metals to incentivize domestic manufacturing.
Leading AI companies experienced significant losses. NVIDIA, a prominent figure in the AI boom, saw a nearly 17% drop in its stock price. Advanced Micro Devices (AMD) declined by 6.4%. Broadcom Inc. and Oracle Corporation also suffered substantial losses, falling by 17.4% and 14%, respectively.
DeepSeek, a Chinese AI startup, recently unveiled its latest model, R1. This model is claimed to be comparable in performance to leading US models like OpenAI's ChatGPT but at a considerably lower cost. DeepSeek was founded by Liang Wenfeng, the head of High-Flyer, an AI-driven quantitative hedge fund. The company focuses on developing open-source AI models, allowing the wider developer community to inspect and improve the software.
DeepSeek's mobile app surged to the top of the US iPhone download charts shortly after its release in January.
Domestic Market:
The domestic equity benchmarks witnessed a sharp decline Monday, pressured by a series of negative factors. Concerns surrounding weak global cues, disappointing Q3 earnings from several companies, uncertainty over U.S. trade policies, and persistent foreign institutional investor (FII) outflows weighed heavily on investor sentiment.
The S&P BSE Sensex tumbled 824.29 points or 1.08% to 75,366.17. The Nifty 50 index declined 263.05 points or 1.14% to 22,829.15, led by weakness in the IT and metal sectors. The broader market suffered a severe blow, with midcap and smallcap indices plunging sharply. The India VIX, a key measure of market volatility, surged over 8%, reflecting heightened investor anxiety.
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