S&P Tumbles 6% as Global Sell-Off Jolts Indian Markets
The global financial markets witnessed a dramatic sell-off yesterday, with the S&P 500 plummeting 6% to its worst day since March 2020. The Indian indices, Sensex and Nifty, followed suit, plummeting over 2,200 points and 800 points respectively. The sudden and sharp decline in global markets has sent shockwaves across the financial world, leaving investors grappling with recession fears and volatility.
The sell-off in US markets, which has now entered its third day, was triggered by concerns over the spread of the Delta variant of the coronavirus, which is putting a strain on the global economy. The US Federal Reserve’s decision to raise interest rates earlier this month has also added to the uncertainty, making investors wary of taking on risk.
The S&P 500, which is a widely followed index of the US stock market, fell 6% yesterday, wiping out all its gains for the year. The index, which had been hovering near its all-time high just a few days ago, is now in bear territory, officially entering a bear market. The Dow Jones Industrial Average and the Nasdaq Composite also fell sharply, with the latter entering bear territory.
The fall in Indian indices was equally dramatic, with the Sensex plummeting 2,200 points, or 4.5%, to 52,500. The Nifty 50, which is a widely followed index of the Indian stock market, fell 800 points, or 4.5%, to 15,400. IT and pharma stocks, which are major components of the Indian market, fell sharply, with the Nifty IT and Nifty Pharma indices falling 5.5% and 4.5% respectively.
The rout in global markets has left investors scrambling to adjust their portfolios, with many opting to take profits and move to safer assets. The Indian rupee also fell sharply against the US dollar, declining by 1.5% to 74.5.
Recession fears are spreading fast, with many economists now predicting a recession in the US and other major economies. The spread of the Delta variant of the coronavirus has added to the uncertainty, with many countries imposing lockdowns and restrictions to contain the spread of the virus.
The fall in IT and pharma stocks is also a concern, as these sectors are major contributors to India’s economy. The Nifty IT index, which includes stocks such as TCS, Infosys, and Wipro, fell 5.5% yesterday, while the Nifty Pharma index, which includes stocks such as Sun Pharma and Dr. Reddy’s, fell 4.5%.
The Indian government has also been monitoring the situation closely, with Finance Minister Nirmala Sitharaman calling an emergency meeting with top economists and financial officials to discuss the impact of the global sell-off on the Indian economy.
In a statement, Sitharaman said, “We are closely monitoring the situation and are prepared to take necessary measures to stabilize the markets and the economy. We are also working closely with the Reserve Bank of India to ensure that the financial system remains stable.”
The RBI has also taken steps to calm the markets, with Governor Shaktikanta Das saying that the central bank is prepared to take necessary measures to ensure financial stability.
In conclusion, the sudden and sharp decline in global markets has sent shockwaves across the financial world, leaving investors grappling with recession fears and volatility. The Indian indices, Sensex and Nifty, followed suit, plummeting over 2,200 points and 800 points respectively. The sell-off is a reminder of the fragile state of the global economy and the need for investors to be cautious.
Source: https://www.thecore.in/podcasts/us-stocks-whacked-for-the-third-day-833088
