Dear Friends,

The global investors and traders have quite shocked on the the Friday Equity Market selloff in US and are expecting a possible blackswan event world over in the financial markets on Monday.

Let's deep dive into this.

Part 1 - Immediate Impact Analysis:

The Nasdaq Composite lost 4.18% its worst single-day decline since the tariff turmoil of April 2025. The Kospi ended 5.5% lower and the Nikkei fell 1.36%. Samsung Electronics down 6.4% and SK Hynix plunging 9.9%

Trigger 1: The Broadcom Disappointment : This was not really about the numbers — which were record numbers!. It was about a forecast that merely met a high bar instead of clearing it, and about a quiet strategy shift : Broadcom will now sell custom AI chips only, rather than the full integrated systems it once planned to provide.

There was a specific miss: Q3 AI chip sales were guided at $16 billion, below analyst estimates of $17.2 billion. Additionally, Broadcom did not raise its full-year AI semiconductor sales forecast, reiterating only the existing “>$100 billion by 2027” target.

New competitive threat — Broadcom’s revenue share of Alphabet’s tensor processing units is expected to decline from ~95% in 2026 to 80% in 2027 and 65% in 2028, as MediaTek gains share. That is being viewed as a structural erosion of what had been an exclusive customer relationship.

Valuation re-set not a collapse :Even with the drop, shares trade at a forward P/E of ~37!

Trigger 2: Hot Jobs Data — “Good News Is Bad News”

The May month's non farm payrolls came in at 172,000 — roughly double the consensus of 85,000 — while unemployment held at 4.3%. The government also upwardly revised March and April figures.

Consequently 10-year yield jumped to 4.54% and the 30-year above 5% on fears the Fed may need to tighten further.
Raised concerns about slowing growth and rising borrowing costs for companies fuelling the AI buildout.

Trigger 3: Iran Peace Deal Disappointment

Israeli PM Netanyahu told CNBC that Israel and the US were ready to return to military action against Iran if needed. Iran risk premium, which had been compressing on MOU/ceasefire extension optimism through late May, re-expanded sharply.

Rotation: The Flight to Defensives

The investors rotated into healthcare and staples as they dumped tech shares. Colgate-Palmolive added 4%, Coca-Cola rose more than 3%, and J&J gained 2%. The Dow’s relative outperformance vs. Nasdaq (-1.35% vs. -4.18%) precisely reflects this rotation dynamic.

India Market : Immediate impact

Negative: The ~$1 trillion semiconductor market cap destruction will weigh on global risk appetite Monday morning.
Partial offset:

Government Securities (G-Sec) Tax Exemption:

FIIs pay a 12.5% LTCG tax on listed bonds held over 12 months and a 20% withholding tax on interest — removing both will increase FPI returns from Indian G-Secs by 15–20%.

The Nifty 50 Analysis :

Monday gap-down risk is real, likely in the 0.5–1.5% range at open.

Around 23,100-23150 Buyers are defending this floor, but bounces are getting noticeably shallower , Gift Nifty is down 350 points approx .
We may open around 23000 on Monday .
Resistance Zone: 23700–24,100, Aggressive supply is waiting here .
Momentum: RSI at 40.64 ( Sideways / Weak ) .
A decisive daily close below 23,100 opens the trapdoor to 22800.
A close above 23540 , will open the door for 23900.

The question is whether the G-Sec tax news generates enough rupee outlook stabilisation to limit the damage through the session.

Just wait and watch and make a cautious approach.