Indian shares rise led by IT as global tech sell-off follows hot US inflation

Indian shares pushed higher on Thursday, buoyed by domestic technology companies even as elevated US inflation sparked a sharp retreat across international equities and semiconductor heavyweights.

While benchmark indices in South Korea and Japan suffered steep slides, the resilience in domestic IT shares underlined India's relative stability against external financial shocks. Strong domestic institutional participation and solid economic fundamentals helped counter broader international selling pressure.

Global tech sell-off hit by rate fears

The downturn across world markets was triggered by official data showing US consumer prices rose by 3.7% year on year in September. It marked the fastest monthly pace since consumer price inflation reached 4.2% in May, and was followed by wholesale figures showing US producer prices climbed 6.3% over the same period.

The figures rattled bond and equity markets by driving expectations that the US Federal Reserve may keep borrowing costs elevated for longer, or even consider further interest rate rises. Higher interest rates raise the cost of financing the massive capital expenditure required for artificial intelligence datacentres and specialized hardware.

International semiconductor and technology counters bore the brunt of the downturn.

Indian markets show resilience

Despite the headwinds from abroad, Indian software service exporters managed to lead gains on domestic bourses. Investors view Indian technology services as better shielded from direct hardware manufacturing disruptions and excessive capital leverage.

Concerns across international markets extended well beyond interest rates. South Korean memory supplier SK Hynix has now surrendered 58% from its summer peak, weighed down by potential oversupply and competitive advancements from Chinese chipmaker ChangXin Memory Technologies (CXMT). CXMT announced at an event in Shanghai that it plans to roll out server-memory products based on a denser architecture before the end of 2026.

Warnings from international financial bodies also weighed on sentiment. The International Monetary Fund cautioned this week that any sharp correction in artificial intelligence valuations could transmit vulnerabilities across international markets, specifically naming Asian trading hubs as among the most exposed.

Yet on Dalal Street, buying support kept the domestic market on a steady footing. While the hotter US inflation numbers limited broader gains and kept currency markets alert, Indian indices maintained positive territory, demonstrating the strength of India's macroeconomic buffers against global volatility.