Sensex, Nifty face global selloff as Kospi, Nikkei tumble like a house of cards; here's why 

Benchmark stock indices Nifty and Sensex face a weak global backdrop on Thursday as Asian markets tumbled like a house of cards after higher-than-expected consumer price inflation in the US raised fears of Fed rate hikes, raising doubts over artificial intelligence -related investment commitments.

Korea's Kospi tumbled 7.6 per cent with chipmakers such as Samsung Electronics and SK Hynix plunging 9 per cent each. Japan's Nikkei was trading 4.53 per cent lower at 64,659.88. Hong Kong's Hang Seng was down 1 per cent at 24,071. China's mainland index Shanghai Composite declined 1.45 per cent while Taiwan's TAIEX also dropped 2.79 per cent.

In overnight trade, Tech-heavy Nasdaq Composite settled 1.88 per cent lower.

The US headline inflation accelerated to 3.7 per cent, above the 3.6 per cent estimate, while core inflation rose to 2.6 per cent. The data suggested that energy costs are beginning to reinforce underlying price pressures, increasing the possibility of another Federal Reserve rate increase or an extended period of restrictive policy, said Hariselvan Radhakrishnan, Founder & CEO of SEBI-registered HST Wealth.

He said the US 10-year treasury yield edged lower to 5.19 per cent, but the modest decline offered little reassurance given that yields remain near multi-decade highs.

"The move does not materially ease concerns over persistent inflation or the prospect of restrictive monetary policy lasting longer. Today’s US producer-price and retail-sales reports will be key in determining whether yields extend their retreat or resume their climb, with implications for the dollar and foreign portfolio flows into emerging markets," Radhakrishnan said.

Add to that, the renewed Houthi attacks on Saudi Arabia have heightened fears of a further escalation in the Middle East, while reports of cargo ships sinking near the Strait of Hormuz have intensified concerns over maritime security, said  Ponmudi R, CEO of Enrich Money.

"With the crisis already disrupting oil flows, the risk of prolonged supply constraints continues to keep crude prices elevated and inflationary pressures in focus," he said.

For now, Gift Nifty futures were trading flat at 22,622, up 4.50 points or 0.02 per cent. It is to be seen how the domestic market reads the Asian selloff -- a reverse in AI trade or inflation-induced global economic pain.