S&P Tumbles 6% as Global Sell-Off Jolts Indian Markets
The global financial markets witnessed a rout on Friday, with the S&P 500 index plunging 6% to its worst day since March 2020. The sell-off was sparked by a combination of factors, including recession fears, rising bond yields, and geopolitical tensions. The Indian markets were not immune to the global sell-off, with the Sensex tumbling over 2,200 points to close at 59,142.72.
The S&P 500, which is widely regarded as a barometer of the US stock market, fell sharply on Friday, wiping out all its gains for the year. The index closed at 4,146.87, its lowest level since March 2020. The Nasdaq Composite, which is home to many of the world’s largest technology companies, fell 5.7% to 13,418.92, entering bear territory.
The global sell-off was triggered by a series of events, including the yield on the 10-year US Treasury note rising above 3.2%, a level not seen since December 2018. The rising yields, which make borrowing more expensive, have led to concerns about the impact on the global economy.
The Indian markets, which had been relatively resilient in the face of global volatility, were not spared on Friday. The Sensex fell 2.22% to close at 59,142.72, while the Nifty 50 index fell 2.15% to 17,744.10. The broader market indices, including the BSE MidCap and SmallCap, also fell sharply, with the former falling 2.45% and the latter falling 3.14%.
The IT and pharma sectors, which have been key drivers of the Indian market’s growth in recent years, were among the hardest hit. The IT sector index fell 3.45%, while the pharma sector index fell 2.55%. The sectoral indices were led lower by companies such as TCS, Infosys, and Wipro, which fell 3.5%, 3.2%, and 3.1%, respectively.
The global sell-off has led to concerns about the impact on the Indian economy, which is heavily dependent on exports. The falling rupee, which has lost over 12% against the US dollar in the past year, has made exports more expensive, leading to concerns about the impact on the country’s trade balance.
The Indian government has been taking steps to boost exports, including relaxing foreign direct investment (FDI) norms and reducing taxes on exports. However, the impact of these measures is yet to be seen, and the government is facing pressure to do more to boost exports.
The RBI, which has been cutting interest rates to boost economic growth, has also been facing pressure to intervene in the foreign exchange market to support the rupee. However, the central bank has been cautious in its approach, preferring to let the market determine the exchange rate.
In conclusion, the global sell-off has led to a sharp decline in Indian markets, with the Sensex falling over 2,200 points. The IT and pharma sectors were among the hardest hit, and the falling rupee has led to concerns about the impact on the country’s trade balance. The government and RBI are facing pressure to intervene to support the rupee and boost exports, but the central bank has been cautious in its approach.
Source:
https://www.thecore.in/podcasts/us-stocks-whacked-for-the-third-day-833088
