Indian Shares Set To Follow Wall Street Lower On AI Jitters

Indian shares look set to open lower on Friday as worries about artificial-intelligence disruption engulfed industries from logistics to commercial real estate.

Traders may also react to official data that showed India’s consumer price inflation increased more-than-expected in January under the new data series.

Consumer price inflation rose to 2.75 percent in January from 1.33 percent in December. Economists had expected inflation to rise to 2.4 percent.

The base year is revised from 2012 to 2024 using the household consumption expenditure survey 2023-24.

The new series added key components, including rural housing, online shopping, and streaming services, in order to better reflect current consumption patterns.

Benchmark indexes Sensex and Nifty fell by 0.7 percent and 0.6 percent, respectively on Thursday as IT stocks extended their slide from the previous session on renewed concerns about the disruption AI start-ups will have on established companies.

Rising oil prices on heightened U.S.-Iran tensions and HUL’s muted Q3 numbers also dented investor sentiment.

The rupee appreciated by 17 paise to close at 90.61 against the dollar on the back of foreign fund inflows.

Foreign institutional investors bought shares worth a net Rs 108 crore on Thursday while domestic institutional investors bought shares to the extent of Rs 277 crore, according to provisional exchange data.

Asian markets were deep in the red this morning as a tech sell-off resumed amid concerns that AI could disrupt entire industries.

The dollar index was little changed while the yield on 10-year U.S. Treasuries declined seven basis points to 4.10 percent ahead of the U.S. consumer price inflation report due later in the day.

Analysts expect the critical core CPI measure to ease to around 2.5 percent, marking a near five-year low.

Gold rose more than 1 percent in Asian trade after slumping 3 percent in the previous session.

Oil prices held steady after falling nearly 3 percent in the previous session, pressured by a bearish outlook from the International Energy Agency (IEA) and signs that diplomatic talks between the United States and Iran could be prolonged. Prices headed for their second weekly decline amid a risk-off tone in wider markets.

Overnight, U.S. stocks tumbled as investors fretted about the impact AI could have on revenues and profit margins of financial, transportation and logistics and even commercial real estate companies.

Networking giant Cisco Systems gave a weaker-than-expected forecast for profitability, signaling higher memory-chip prices are taking a toll.

In economic news, Treasury yields reached two-month lows after the number of Americans filing first-time unemployment claims decreased less than expected last week and existing home sales tumbled to the lowest level in more than two years in January.

The tech-heavy Nasdaq Composite lost 2 percent, the S&P 500 slumped 1.6 percent and the Dow declined 1.3 percent.

European stocks ended mixed on Thursday despite upbeat earnings from the likes of Legrand, Hermes and Siemens.

The pan-European Stoxx 600 gained half a percent. The German DAX finished marginally lower and the U.K.’s FTSE 100 fell 0.7 percent while France’s CAC 40 edged up by 0.3 percent.