Sensex Flat, Nifty Above 24,000; IT Stocks Surge Despite Global Chip Rout

Indian benchmark indices opened with little change on Tuesday, after snapping a five-session losing streak in the previous session, as strong buying in IT stocks and lower crude oil prices offset mixed global cues and caution ahead of the US Federal Reserve's policy decision.

At around 9:15 am, the Sensex was up 14.95 points, or 0.02%, at 76,850.73, while the Nifty gained 6.65 points, or 0.03%, to 24,002.60.

Market breadth remained marginally positive, with 1,192 shares advancing, 1,013 declining and 182 remaining unchanged.

Infosys, TCS, Tech Mahindra, HCL Technologies and Cipla were among the major gainers on the Nifty, while Bharat Electronics, Coal India, Power Grid Corporation, NTPC and Reliance Industries were among the top losers.

IT Stocks Rally Despite Global Chip Selloff

Technology stocks emerged as the standout performers in early trade, with the Nifty IT index gaining more than 2.5%.

Coforge led the sectoral rally with a gain of 6.25%, followed by Mphasis, which advanced 3.62%. TCS climbed 3.11%, Tech Mahindra gained 2.60% and LTIMindtree rose 2.54%.

The strength in domestic IT stocks came despite a sharp selloff in global semiconductor shares. On Wall Street, Nvidia fell 5%, SanDisk plunged 11% and Micron declined 5%, dragging the Philadelphia Semiconductor Index 4.2% lower.

The Dow Jones Industrial Average gained 0.5%, while the S&P 500 ended flat and the Nasdaq slipped 0.2% as weakness in chip stocks offset gains elsewhere.

Enterprise software and AI-adjacent stocks, however, witnessed buying, with Salesforce jumping 7%, Microsoft gaining 3% and Palantir rising 7%.

Asian technology stocks also remained under pressure. South Korea's KOSPI declined sharply, with SK Hynix plunging more than 10% and Samsung Electronics falling over 8%.

The selloff followed the blockbuster Shanghai Star Market debut of China's ChangXin Memory Technologies (CXMT), whose shares surged around 500%. The development, along with progress in China's domestic chipmaking capabilities, raised concerns over increasing competition in the global memory chip market.

Lower Crude Provides Support

A sharp correction in crude oil prices provided support to domestic equities after elevated energy prices had weighed on markets in recent sessions.

Brent crude has corrected to around $87 a barrel amid signs of easing geopolitical tensions between the US and Iran. US President Donald Trump confirmed that talks with Tehran were continuing, although shipping activity through the Strait of Hormuz remained below normal levels.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the sharp correction in Brent crude to $87 was a strong fundamental as well as sentiment positive for the domestic market.

"There are many positive factors that have the potential to sustain the mild rally in the market. The rally is unlikely to be consistent and steady. There will be occasional profit booking and corrections," Vijayakumar said.

He added that progress in the monsoon, improving corporate earnings and strong credit growth were among the other factors supporting the market.

"The Q1 results declared, so far, indicate earnings revival and this has the potential to sustain in the coming quarters. Fourth, credit growth in the economy is impressive running at around 18% and there is good volume growth in sectors like automobiles," he said.

Vijayakumar added that weakening of the global chip trade could also prove positive for India.

Fed Decision, Q1 Earnings In Focus

Investor sentiment remained cautious ahead of the US Federal Reserve's policy decision, with markets increasingly factoring in the possibility of a rate hike.

S&P 500 futures extended losses during Asian trading as investors positioned themselves for the Fed decision and a busy week of earnings from major US companies.

On the domestic front, quarterly earnings are expected to remain a key stock-specific trigger, with Bharat Electronics, Tata Power, Coal India and InterGlobe Aviation among the companies in focus.

Foreign institutional investors continued to remain net sellers in Indian equities, while sustained buying by domestic institutional investors provided support to the market.