If you’ve been following global markets this week, one clear trend stands out: Asian equities are under pressure.
From South Korea to Japan, investors have been exiting positions as the recent technology and artificial intelligence (AI) rally loses momentum.
South Korea’s Kospi has dropped 5.81%, Japan’s Nikkei 225 is down 4.15%, Hong Kong’s Hang Seng has slipped 1.76%, and China’s CSI 300 has fallen about 3% on Friday. The decline has erased significant market value as investors unwind positions in tech and AI-related stocks amid concerns that valuations had become overheated.
Attention is now shifting to India.
With Dalal Street closed for a three-day weekend due to the Muharram holiday, Indian markets have so far avoided reacting in real time. When trading resumes on Monday, investors are closely watching whether Sensex and Nifty will follow the regional selloff or whether strong domestic fundamentals will offer some protection.
WHY ASIAN MARKETS ARE FALLING
The selloff has largely been driven by worries that the AI-led rally, especially in semiconductor stocks, had become too stretched.
South Korea has been hit hardest due to the heavy weighting of companies like Samsung Electronics and SK Hynix in its indices. Japan has also seen sharp declines in technology stocks, while selling pressure has spread to Hong Kong and mainland China as investors booked profits after months of gains.
Even strong earnings from Micron Technology briefly supported sentiment, but that optimism faded as markets refocused on valuation concerns and fears that AI-related pricing had moved ahead of fundamentals.
WILL INDIAN MARKETS FOLLOW THE TREND?
Market analysts expect a weak opening in India, but not necessarily a sharp crash.
According to Sebi-registered research analyst Shashank Udupa, GIFT Nifty signals only a mild negative opening compared to the deeper falls seen in North Asia. He noted that India’s market structure is more diversified and less concentrated in a single tech-heavy segment like South Korea.
Experts expect a gap-down start followed by a volatile early session rather than a sustained collapse.
IMPACT OF THE 3-DAY WEEKEND
The extended closure may initially amplify negative sentiment when markets reopen, as India will be reacting to several days of global movement at once.
However, some analysts argue it may also allow panic to settle before trading resumes. The key test will be the first hour of trading on Monday, which will reveal whether selling pressure persists or stabilises.
WHY INDIA MAY BE MORE RESILIENT
Unlike North Asian markets, India is driven more by domestic consumption and financials than by semiconductor exports or AI capital expenditure cycles.
Domestic institutional investors and steady SIP inflows have consistently absorbed foreign outflows, helping cushion recent volatility.
Analysts also point out that while global sentiment will influence the opening, domestic flows often determine how the market closes.
SECTOR-WISE OUTLOOK
IT stocks may remain under pressure, although much of the weakness is already reflected in valuations after recent corrections. Banking and consumption-linked sectors are seen as relatively more stable, while high-beta segments like metals, capital goods, and defence may see sharper swings.
SHOULD INVESTORS WORRY?
Experts describe the current phase more as a valuation reset in overheated AI-linked global trades rather than the beginning of a broader market downturn.
While Monday may begin on a cautious note, India’s domestic demand base and steady local inflows are expected to limit downside pressure compared to other Asian markets.
