Sensex drops 350 pts, Nifty slips below 25,500 on weekly expiry day

Market Overview - The S&P BSE Sensex fell 0.31% to 83,277.03, down 258 points, while the NSE Nifty 50 dropped 0.32% to 25,492.15 at the open [1][15] - By 10:40 AM, Sensex traded 388 points or 0.46% lower at 83,148, and Nifty50 fell 114 points or 0.46% to 25,457 [1][15] - In the broader market, the Nifty Midcap 100 slipped 0.3%, while the Nifty Smallcap 100 eased 0.2% [2][15] Sector Performance - Sectoral trends were largely negative, with all major indices in the red except Nifty Auto and Nifty IT, which edged higher by 0.3% and 0.4%, respectively [2][15] - Financial stocks led the declines, with Bajaj Finance, Tata Motors Passenger Vehicles, and Tata Steel among the top laggards, sliding between 1% and 7% [15] AI Trade Insights - The AI trade, which was weak last week, bounced back with a 2.2% gain in Nasdaq [5][15] - Current valuations of AI stocks range from 28 to 51, compared to Nasdaq's PE of 32, indicating that there is no bubble yet in AI stocks [6][15] - Concerns exist that returns from AI stocks may take longer than expected, and as long as this trade persists, foreign institutional investors (FIIs), particularly hedge funds, may continue to sell in India, weighing on Indian markets [6][15] Investment Strategy - Investors are advised to prioritize valuations and safety, as Indian retail investors are investing in IPOs priced at 230 times earnings, which is considered dangerous [7][15] - Nvidia, the most valuable company in the world, is trading at 51 times earnings, highlighting the disparity in valuations [7][15] Global Market Trends - Asian stocks climbed, with gold surging nearly 3% to trade above $4,100, and the Nasdaq jumping 2.3% [8][15] - The rally followed the U.S. Senate's passage of a funding deal to end the government shutdown, improving risk appetite [8][15] - Oil prices slipped, with Brent crude futures easing 0.2% to $63.93 a barrel, amid renewed worries over excess supply [10][15] Currency Movements - The Indian rupee opened nearly flat at 88.7075 per U.S. dollar, supported by positive remarks from President Trump regarding a potential trade deal [11][15] - The dollar index edged up to 99.66, while most Asian currencies weakened as traders monitored the U.S. federal shutdown situation [11][15]