Global markets were in the deep red on Monday as the US economic slowdown weighed heavily on the financial markets
Mumbai: Equity market benchmark indices Sensex and Nifty crashed over 3 per cent each on Monday in line with extremely weak trends in global markets amid fears of a slowdown in the US economy.
An over 12 per cent plunge in Japan’s Nikkei also dented markets’ sentiment badly.
The 30-share BSE Sensex tanked 2,686.09 points or 3.31 per cent to 78,295.86 during the afternoon trade. The NSE Nifty tumbled 824 points or 3.33 per cent to 23,893.70.
Investors’ wealth eroded by Rs 17.11 lakh crore during the afternoon trade to Rs 4,40,04,979.86 crore.
Global markets were in the deep red on Monday as the US economic slowdown weighed heavily on the financial markets.
Heavy selling pressure was seen in all major Asian markets. Japan crashed by 10 per cent, Seoul tumbled over 8 per cent, Taipei fell by 4.43 per cent, Jakarta was down nearly 2 per cent, Hong Kong and Shanghai were down 1.43 per cent and 0.83 per cent) respectively.
South Korea’s news agency Yonhap reported that due to a crash trading in the local benchmark index KOSPI 200 index held for five minutes.
The US stocks fell for the second consecutive session on Friday last week, with the Dow Jones Industrial Average sliding 1.51 per cent and the tech-heavy Nasdaq Composite sinking 2.43 per cent.
A disappointing jobs report spurred investor fears that the world’s largest economy is headed toward a recession, the report said
Japan’s Nikkei 225 share index plunged more than 12 per cent on Monday as investors worried that the US economy may be in worse shape than had been expected dumped a wide range of shares. It dropped 5.8 per cent on Friday and has now logged its worst two-day decline ever, dropping 18.2 per cent in the last two trading sessions.
From the Sensex pack, Tata Motors slumped 6 per cent.
Adani Ports, Tata Steel, SBI and JSW Steel were the other big laggards.
However, Hindustan Unilever and Nestle were trading in positive territory.
“The rally in the global stock markets has been driven mainly by consensus expectations of a soft landing for the US economy. This expectation is now under threat with the fall in US job creation in July and the sharp rise in the US unemployment rate to 4.3 per cent. Geopolitical tensions in the Middle East also are a contributing factor,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,310 crore on Friday, according to exchange data.
“Anxiety remains high, especially after Friday’s unexpectedly weak US July jobs report, suggesting that volatility will be the hallmark of the day,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.
Global oil benchmark Brent crude declined 0.90 per cent to USD 76.12 a barrel.
“The global market is reeling as bears enter with a cocktail of bad news.
The fear of a reverse Yen carry trade, following an interest rate hike in Japan, was the initial catalyst. This was compounded by fears of a recession in the USA after extremely poor jobs data, which spooked market sentiment,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Amid widespread selling pressure, the BSE benchmark plunged 885.60 points or 1.08 per cent to close at 80,981.95 on Friday. The broader Nifty of NSE dropped 293.20 points or 1.17 per cent to end at 24,717.70.