Indian engineering stocks have experienced significant pressure during the broader market rally, with companies like Cummins India, Thermax, and PI Industries facing substantial declines. According to reports from The Financial Express, over the past five trading sessions, while the Nifty 50 and Nifty 500 gained nearly 8% and 5% respectively, shares of these engineering companies fell 8.7%, 11.3%, and 18.4% respectively. Bharat Forge remained largely unchanged during this period.
According to The Financial Express, Indian investors have been seeking ways to participate in the AI-led investment boom through ancillary businesses such as high-horsepower diesel engines, gas generator sets and cooling equipment for proposed data centres. However, with sentiment towards the AI trade turning cautious, some of these engineering companies are facing margin squeeze. Aashish Somaiyaa, equity partner at White Oak Capital, attributed the sell-off to growing scepticism around the AI trade, noting that companies associated with power sector were thought to benefit from data centre construction and related supplies. The latest developments show NASDAQ plummeting amid concerns about the sustainability of the AI trade and expected tighter AI regulation after Democrats' takeover of both houses of Congress.
The AI trade concerns have extended globally, with major AI-related stocks experiencing significant declines. As reported by The Financial Express, Nvidia, the chipmaking giant behind many of the semiconductors used in AI products, closed down 9% on Thursday, while Advanced Micro Devices saw shares fell 17%. SanDisk, another AI hardware firm, plummeted more than 22% in value by market close. The selloff hammered many artificial intelligence firms as investors appeared to digest risk for the sector posed by newly empowered Democrats, many of whom ran campaigns critical of artificial intelligence data centers.
The downturn in markets largely reversed blockbuster gains from the previous session, with major tech companies behind AI development also experiencing significant declines. According to The Financial Express, Microsoft, which holds a large stake in OpenAI, saw its stock price close down more than 3%, while Amazon, which has spent hundreds of billions on its build-out of AI infrastructure, also dropped more than 2%. The Dow Jones Industrial Average closed down more than 1,800 points on Thursday, wiping out all of the rally from a day earlier when midterm election results propelled the index to its best trading session in more than a year.
As reported by The Financial Express, Thermax reported a 5% decline in net profit for the quarter ended September 2026, citing higher input costs and impairments related to renewable energy projects. PI Industries, a chemical engineering and custom synthesis player, reported a 15 percentage point decline in its profit margin during the quarter amid pricing pressure. Higher raw material costs were compounded by aggressive pricing from Chinese suppliers for this company.
