“Sharp selloff in IT stocks has clearly weighed on overall market sentiment and was one of the key reasons benchmark indices corrected nearly 1 per cent. IT carries a significant weight in the Nifty, and weakness across major technology names triggered broad-based profit booking. Investor sentiment was further impacted by concerns over a potential slowdown in global technology spending, uncertainty surrounding US interest rate expectations, and pressure on the dollar-linked earnings outlook of export-oriented companies,” said Ponmudi, CEO, Enrich Money.
However, the correction, he said, appears more sentiment-driven than structural at this stage. India’s domestic growth story remains intact, supported by strong SIP inflows, improving corporate earnings across several sectors, and ongoing government infrastructure spending.
“While IT may continue to face near-term volatility due to global macro uncertainties, sectors such as defence, capital goods, financials, and select manufacturing names continue to attract investor interest. Any further weakness in quality IT stocks could also create long-term accumulation opportunities for investors with a 2–3 year horizon,” said Ponmudi.
Silver ETFs plunge
Notably, the Silver ETFs bore the brunt of the correction, falling as much as 6 per cent during the session, while gold ETFs declined over 3 per cent.
Among silver ETFs, ICICI Prudential Silver ETF, HDFC Silver ETF, and UTI Silver ETF were among the worst hit, declining nearly 6 per cent each. DSP Silver ETF and Motilal Oswal Silver ETF fell 5.77 per cent, while Aditya Birla Sun Life Silver ETF dropped 5.75 per cent.
“Silver ETFs are witnessing a sharper decline than Gold ETFs because silver is inherently a more volatile asset. While gold is primarily a safe-haven investment, silver derives a significant portion of its demand from industrial sectors such as electronics, solar energy, EVs and manufacturing. As global growth concerns increase and investors reduce exposure to risk assets, silver prices tend to react more aggressively than gold,” said Ponmudi.
Gold ETFs fall over 3%
Gold ETFs also witnessed sharp losses, with ICICI Prudential Gold ETF leading the decline, down 3.5 per cent. Invesco India Gold Exchange Traded Fund fell 3.2 per cent, while Kotak Gold Exchange Traded Fund and Axis Gold Exchange Traded Fund slipped 3.12 per cent and 3.13 per cent, respectively.
What lies ahead for precious metals?
Despite the correction, Ponmudi continues to remain optimistic on the outlook for precious metals. The correction, he believes, should be viewed in the context of the extraordinary rally witnessed in precious metals over the past year. Silver ETFs, he said, have amplified the downside because of silver’s dual exposure to both investment sentiment and industrial demand cycles.
(Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers’ discretion is advised.)
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