Sensex set to open lower as global chip rout, CXMT’s 500% surge rock Asian markets

Sensex is set to open lower on Tuesday, caught in the crossfire of a global chip rout, a blockbuster Chinese IPO and risk‑off sentiment sweeping across Asian markets.

The cue for Dalal Street is coming straight from Wall Street and East Asia. On Monday, US indices closed mixed: the Dow gained 0.5%, the S&P 500 was flat, and the Nasdaq slipped 0.2%, but the real story was a sharp selloff in semiconductors. Nvidia fell 5%, Micron dropped 5%, SanDisk plunged 11%, and the Philadelphia Semiconductor Index sank 4.2%, signalling aggressive profit‑taking in one of the world’s most crowded trades.

The shock then intensified in Asia. In Shanghai, China’s leading DRAM maker ChangXin Memory Technologies (CXMT) surged roughly 500% on its STAR Market debut, instantly becoming the mainland’s most valuable listed company, with a valuation around 540 billion dollars.

DRAM chips are core to smartphones, PCs, servers and AI systems, and the combination of CXMT’s sky‑high pricing and progress in domestic chipmaking equipment stoked fears that Chinese memory could soon reach marquee global customers, undercutting incumbents faster than expected.

Korean equities bore the brunt -- the KOSPI tumbled as tech stocks sold off, SK Hynix slid more than 10%, and Samsung Electronics fell over 8%, with US–Korea tech correlation hitting its highest level since 2021.

In futures trade, the S&P 500 extended losses during the Asian session as investors positioned cautiously for a heavy week of mega‑cap earnings and the US Federal Reserve’s rate decision.

All of this has translated into a broad “risk‑off” mood across Asian markets -- the same mood that is expected to weigh on the Sensex at the opening bell.

India's domestic resilience meets global risk-off

Ironically, India's macro backdrop looks relatively supportive. The rupee appreciated sharply by 65 paise on Monday to close at 95.91, emerging as Asia’s top performer for the day, helped by a sharp drop in crude oil prices, a softer dollar index and a renewed risk‑on tone towards Indian assets. Lower oil and a weaker dollar typically ease pressure on India’s external balances and inflation, providing a tailwind to equities.

The Nifty, too, has shown signs of resilience. It snapped a five‑session losing streak with a 228‑point rally to 23,995, and has now recovered more than 400 points from Friday’s low of 23,606. That 23,606 zone is technically significant: it coincides with a rising trendline drawn from the April swing low of 22,182 through the June swing low of 23,070, making it a key support for the ongoing uptrend.

For momentum to truly strengthen, however, the index needs a decisive close above 24,200; on the downside, immediate support lies near 23,800, with 23,606 as the more critical floor.

Devarsh Vakil, Head of Prime Research at HDFC Securities, notes that despite this constructive technical picture and supportive currency move, Indian markets are “set to open lower today, as plunging Asian markets weigh on sentiment” -- meaning Sensex is likely to follow the regional risk‑off signal at the open, even if domestic levels remain structurally intact for now.

The narrative for Tuesday, then, is not about weakness in India’s fundamentals, but about contagion from a global tech shock. A single, spectacular listing in Shanghai has forced investors to reprice the future of memory chips, hammered Korean bellwethers, softened US futures and turned Asian screens red.

Sensex is stepping into that environment, with strong rupee and Nifty support levels in its favour, but facing global headwinds it cannot ignore.