Why global stock markets are falling and what it means for India

Global stock markets fell sharply on Friday, triggered by a rout in AI-related stocks after Democratic gains in the US midterm elections raised fears of a moratorium on new AI data centres. The Nasdaq 100 dropped 6.4% overnight, wiping out $2.3 trillion in value. Korea's Kospi hit its circuit breaker with an 8.8% fall, while Japan's Nikkei declined 5.7%. Analysts note a federal AI data centre moratorium is unlikely, but state-level pauses are possible, with Texas and Georgia candidates backing temporary halts. High interest rates, elevated oil prices, and mixed Q3 results from US AI companies have also weighed on markets. For India, immediate pressure is likely on IT stocks, but sustained global deleveraging could affect domestic sectors through foreign selling. Gift Nifty fell 0.71%, showing relative resilience, though a decisive breach of the 24,330 level would signal broader risk aversion outweighing domestic supports.