Stock Market Crash! Sensex, Nifty slip over 1% — Panic selling or buying opportunity? Anil Singhvi explains

Stock Market Crash: Indian benchmark indices traded lower on Monday, tracking weakness across global markets after a sharp sell-off in US technology and Asian equities.

At the day's low, the Sensex had fallen 924.40 points, or 1.25 per cent, while the Nifty50 was down 296.55 points, or 1.27 per cent.

At around 10:48 am, the BSE Sensex was down 544.09 points, or 0.73 per cent, at 73,699.25. The NSE Nifty50 was trading 166.65 points, or 0.71 per cent, lower at 23,200.05.

Market expert Anil Singhvi said the weakness in Indian markets was largely due to negative global cues, but added that the domestic market may remain relatively resilient compared with some overseas peers.

Strong US Data Triggered Global Correction

According to Singhvi, the biggest reason behind the correction in US markets was stronger-than-expected employment data, which raised concerns that the US Federal Reserve could delay interest rate cuts.

He said higher interest rates generally strengthen the US dollar and bond yields, creating pressure on equities and commodities.

"The strong US jobs data has made investors believe that interest rate cuts may not come soon. That has led to a stronger dollar and higher bond yields, which are not favourable for stock markets," Singhvi said.

He added that the rise in bond yields also weighed on commodities, leading to weakness in gold, silver and industrial metals.

AI and Chip Stocks Under Pressure

Singhvi said another major factor behind the global sell-off was the sharp decline in AI and semiconductor stocks. He noted that leading technology companies, including Nvidia, Broadcom, Intel and Micron, witnessed heavy selling, pulling the Nasdaq lower.

"The AI and semiconductor stocks that had been driving the rally have now become the reason for the correction," he said.

According to Singhvi, global investors had been allocating significant capital to AI-related themes over the past several months, particularly in the US and parts of Asia.

India May Not See Similar Panic

Despite the global weakness, Singhvi believes Indian markets are unlikely to witness the same level of panic. He said India did not participate fully in the AI-driven rally that lifted several overseas markets and therefore may not face a comparable correction.

"The kind of panic seen in markets like the Nasdaq, Japan and South Korea is unlikely in India because we were never the biggest beneficiaries of the AI trade," Singhvi said.

He added that if global investors begin reducing exposure to AI-focused stocks, some of that capital could gradually shift towards markets like India.

Banking Stocks Could Lead the Market

Singhvi said banking stocks remain his preferred sector despite the broader market weakness. He cited supportive domestic factors, including the Reserve Bank of India's policy stance and measures aimed at improving liquidity in the banking system.

"Banking stocks have entered a favourable phase again. Our focus remains on banks because they are likely to outperform from here," he said.

According to Singhvi, the Bank Nifty's support zone around 52,800 remains important and could help limit downside in the sector.

He added that even if benchmark indices remain under pressure, banking stocks may decline less than several other sectors.

Caution on Metals, Power and IT

Singhvi advised investors to remain cautious on metal and power stocks, saying weakness in global commodity markets could continue to affect these sectors.

He also said that power-related stocks, which had benefited from enthusiasm around the AI theme, could see some profit-booking if that trend reverses.

On information technology stocks, Singhvi suggested waiting for more clarity before taking fresh positions. "There is no need to rush into IT stocks. We should first see how the sector responds over the next few trading sessions," he said.

He maintained that while global markets are facing a broad correction, India could remain relatively stable, with banking stocks likely to emerge as one of the stronger segments of the market.