Nasdaq Falls 6% in 4 Sessions: Will Indian Markets Benefit if the US Tech Selloff Deepens? Analysts Say Not So Soon

The Nasdaq composite index has declined approximately 6% over four consecutive sessions since June 5, 2026, triggering a question that Indian investors are asking: will the deepening US technology selloff eventually benefit Indian equity markets through capital rotation? The answer from market analysts is cautiously negative for the near term. The Nasdaq sell-off, which began with Broadcom’s disappointing Q3 AI chip sales guidance and was extended by Oracle US’s heavy capex plans, is not simply a US-specific story. It reflects a global reassessment of AI-related valuations, which is why Indian AI and IT stocks are falling in sympathy. Indian FII flows remain negative, and the Nifty 50 itself is down approximately 1.2% today, suggesting that the much-awaited rotation into Indian equities is not imminent.

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Nasdaq and Global Tech Selloff: Scorecard

Index/Stock	Move	Context
Nasdaq Composite (week of June 5)	-4.5% to -6%	Post-Broadcom AI guidance miss
Broadcom (AVGO, June 4)	-14%	Q3 AI chip guidance $16 Bn vs $17.2 Bn estimate
Samsung Electronics	-5%	Kospi semiconductor drag
SK Hynix	-6.7%	Memory chip selloff
SoftBank Group (Japan)	-7.5%	AI investment portfolio de-risking
TSMC (Taiwan)	-2.1%	Semiconductor supply chain risk-off
Oracle US (ORCL, June 10-11)	~-7% after-hours	$55.7 Bn capex guidance
AMD and Intel (June 5)	-17% and -10%+	AI capex concerns, valuation reset

India’s Market Performance During the Nasdaq Selloff

Indian Index/Sector	June 11 Move	Why
Nifty 50	~-1.2%	Global risk-off, FPI selling
Nifty IT	-2% to -3%	Direct Nasdaq/US tech correlation
E2E Networks (AI stock)	-4.99% (lower circuit)	Global AI selloff tracking
Netweb Technologies (AI stock)	-4.94%	Global AI selloff tracking
OFSS	-2.39%	Oracle US parent Q4 results
FII/DII (June 10)	FII: -Rs 2,124 Cr; DII: +Rs 3,123 Cr	FII selling persists

Why India Is Not Immediately Benefiting

The assumption that a Nasdaq selloff automatically benefits India rests on a capital rotation thesis: money leaving US tech will seek better-valued opportunities in emerging markets like India. In practice, this rotation takes time to materialise for three reasons. First, FII flows into India are still negative: FIIs net sold Rs 2,124.98 crore on June 10 and Rs 4,566 crore on June 9, suggesting that foreign institutional capital is moving to cash or other safe havens rather than rotating into India. Second, Indian AI and tech stocks, including E2E Networks and Netweb Technologies, are falling alongside the Nasdaq, showing direct sentiment correlation rather than de-coupling. Third, global risk-off events typically cause simultaneous selling across all equity markets before selective rotation begins.

The Medium-Term India Rotation Case

Despite near-term headwinds, the structural case for India to eventually benefit from a sustained Nasdaq and US tech correction is credible. India is significantly under-owned by FPIs relative to its economic weight: FPI equity AUM in India represents roughly 18% of total market cap, below the historical 22-24% range. India’s FY27 GDP growth is projected at 6.4-6.8%, one of the highest among major economies. Corporate earnings recovery is visible in sectors including banks, auto, and infrastructure. Khushi Mistry, Research Analyst at Bonanza, identified the play as “concentrated in domestic financials, consumption, and infrastructure with genuine earnings recovery visibility in FY27.” The full Nasdaq-to-India rotation trade will likely require a stabilisation in global AI sentiment and a turn in FPI flows, both of which are not yet in evidence.

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Conclusion

The Nasdaq falling 6% in 4 sessions is creating a global risk-off environment, not an immediate India rotation opportunity. Indian IT and AI stocks are falling in line with global tech, and FII flows remain negative. The medium-term case for India is strong on structural grounds, but near-term, the rotation into domestic-facing sectors is more likely to benefit India than a direct inflow from Nasdaq outflows. Track live market data and FII/DII flows on Univest.

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Frequently Asked Questions

Why is the Nasdaq falling and what caused the 6% decline in 4 sessions?

Ans. The Nasdaq has declined approximately 6% over four sessions beginning June 5, 2026. The primary trigger was Broadcom’s (AVGO) Q3 fiscal 2026 AI chip sales guidance of $16 billion, which fell below the analyst estimate of $17.2 billion. This ‘guidance miss’ caused a broad sell-the-AI-story reaction across global technology markets. Broadcom fell 14% on June 4, pulling down the entire semiconductor supply chain, including Samsung, SK Hynix, TSMC, and SoftBank. The Nasdaq, which is heavily weighted toward AI and technology companies, reflected this risk-off move across multiple sessions. On June 10, Oracle US’s $55.7 billion capex guidance added another layer of concern about AI infrastructure spending sustainability.

Will Indian markets benefit from the US tech selloff?

Ans. Analysts say Indian markets will not see an immediate benefit from the US tech selloff, despite the theoretical rotation argument. Khushi Mistry of Bonanza notes that while the rotation thesis is real, it is selective and concentrated in domestic-facing sectors like financials, consumption, and infrastructure. The primary obstacle is that FPI flows into India are still negative: FIIs were net sellers of Rs 2,124.98 crore on June 10 and Rs 4,566 crore on June 9. Indian AI stocks including E2E Networks and Netweb Technologies are also falling in line with the global selloff, showing that India’s tech sector cannot decouple from US sentiment. The broader Nifty 50 is also down approximately 1.2% today.

When could India benefit from the US tech selloff?

Ans. A meaningful rotation into Indian equities from the US tech selloff would likely require several conditions to align: FII flows turning sustainably positive (currently still negative), the rupee remaining stable, Indian corporate earnings showing recovery in Q1 FY27 results, and the Reserve Bank of India potentially cutting rates to support domestic consumption. On a structural basis, India is under-owned by FPIs relative to its GDP weight in global indices, which means the room for catch-up flows exists. However, in the near term, analysts like Khushi Mistry of Bonanza see the play as concentrated in domestic financials, consumption, and infrastructure rather than a broad-based Nifty re-rating triggered by US tech outflows.

How should Indian investors respond to the Nasdaq selloff?

Ans. Indian investors should distinguish between two categories of Indian stocks during the Nasdaq selloff. First, Indian stocks with direct US tech correlations, including IT services companies (Infosys, HCL Tech, TCS), AI/data centre plays (E2E Networks, Netweb Technologies), and IT subsidiaries of US companies (OFSS), are likely to remain under near-term pressure as long as the global AI selloff continues. Second, domestically-driven Indian sectors including private sector banks, FMCG, infrastructure, and consumption names have lower correlation to Nasdaq movements and may prove more resilient. Investors with a long-term horizon can use Nasdaq-driven corrections in quality Indian IT stocks as staggered accumulation opportunities.