Trump tariff threats, FII outflows and AI capex concerns weigh on markets even as Nilesh Shah sees India’s aqua-culture upside
Indian equities slid sharply Tuesday, with the Sensex tumbling over 850 points and the Nifty 50 down 0.8% by mid-morning, dragged by heavyweights Infosys and Bharti Airtel.
At 11:10 AM, the Nifty traded at 25,506.5, down 206.5 points, while the Sensex fell 0.93% to 82,517.6.
The broader market echoed the weakness.
- BSE MidCap 150: down 0.8%
- SmallCap 250: down 1%
IT stocks crack on AI anxiety
The selloff centered on technology shares.
Infosys and Bharti Airtel together shaved over 250 points off the Sensex. HCL Technologies, TCS, Tech Mahindra and Infosys fell around 3% each. Eternal led percentage losses, sliding nearly 4%.
The Nifty IT index hit a two-year low, as renewed debate over AI monetisation spooked investors.
Jefferies’ Christopher Wood struck a cautious tone at Business Standard’s Manthan summit.
- “India is the AI-reverse trade globally.”
- “As long as AI capex is surging, India will underperform.”
- US markets may soon question hyperscalers’ returns on AI spending.
Wood added that not everyone is bearish on Indian IT. The divide centers on how effectively firms adapt to the evolving AI landscape.
A deeper concern looms: AI encroaching on white-collar roles, a fear gripping developed markets first.
Tariff drama adds pressure
Global sentiment remained fragile after US President Donald Trump announced 15% temporary global tariffs over the weekend and warned countries against backing away from trade deals—even after the US Supreme Court ruled his tariffs unlawful.
Markets now await Trump’s State of the Union address for clarity.
As Dr. VK Vijayakumar of Geojit noted, more tariff “drama” may unfold. Investors are bracing for policy volatility.
FII selling: Two triggers
Foreign institutional investors have been trimming India exposure, Wood said.
- Late 2024: China bottomed at ~7x earnings, prompting reallocations
- Investors overweight Taiwan and South Korea reduced India positions
The result: sustained pressure on frontline indices.
Diverging expert views at Manthan
Kotak AMC’s Nilesh Shah offered a nuanced take.
He said India’s tools to manage uncertainty “are not working at this time,” with no clear sectoral signals of downturn.
Yet retail flows remain steady.
- Possible diversification into gold, silver, multi-asset funds
- Mutual fund penetration still below currency in circulation
Shah also stressed that India may not dominate large language models but can leverage LLMs and SLMs to build applications for global markets.
In a brighter note, he flagged a structural opportunity:
With US tariffs reducing and a proposed India-EU FTA likely lowering duties further, India could emerge as a global leader in aquaculture.
It’s a reminder that even on red-screen days, structural themes evolve beneath the surface.
Stock-specific moves
- Brahmaputra Infrastructure rose 5% on a ₹397 crore order win
- One Mobikwik Systems surged 12.7% after broking approval
- Ola Electric, Adani Wilmar hit fresh lifetime lows
- IDFC First Bank faced estimate cuts after a ₹590 crore fraud disclosure
Meanwhile, Citi said the RBI may rebuild forex reserves if the rupee strengthens toward 88–89 per dollar.
The bigger picture
India’s markets face a cocktail of AI uncertainty, tariff risks, and shifting global capital flows.
But amid the volatility, investors are already debating the next structural winners—from AI applications to aquaculture exports.
The question: Is this a cyclical correction—or a deeper reset in global tech and capital allocation?
TL;DR:
Sensex fell over 850 points amid IT weakness, AI monetisation fears, and renewed US tariff tensions. Nifty IT hit a two-year low as FIIs trimmed India exposure. Experts flagged AI capex risks but also highlighted opportunities in aquaculture and AI-led applications.
AI summary:
- Sensex drops 850 points; Nifty down 0.8%
- IT stocks lead losses; Nifty IT at 2-year low
- Trump tariffs dent global sentiment
- FIIs reallocate toward China
- Nilesh Shah sees aquaculture opportunity
