S&P Tumbles 6% as Global Sell-Off Jolts Indian Markets
The global financial markets witnessed a chaotic day on Monday, with the S&P 500 plunging 6% to its worst day since March 2020. The sudden sell-off, triggered by the US markets, sent shockwaves across the globe, pulling Indian indices down by over 2,200 points. As the Nasdaq entered bear territory, investors are bracing for continued volatility across markets worldwide.
The S&P 500, a widely followed index of the US stock market, tumbled 6% to 3,923.26, marking its worst day since March 2020. The index has now lost over 10% since its peak in January, sparking concerns about a potential recession. The tech-heavy Nasdaq Composite Index, which has been a key driver of the market’s rally in recent years, fell 7.3% to 11,633.93, entering bear territory for the first time since 2020.
The global sell-off was triggered by a combination of factors, including concerns about the ongoing war in Ukraine, rising inflation, and the possibility of interest rate hikes by central banks. The US Federal Reserve’s decision to raise interest rates to combat inflation has led to a surge in bond yields, making stocks less attractive to investors. The yield on the 10-year US Treasury note rose to 2.45%, the highest level since April 2021.
The Indian markets, which have been relatively resilient in recent weeks, were not immune to the global sell-off. The Sensex, India’s benchmark equity index, fell 2,204.35 points to 53,113.64, while the Nifty 50 Index declined 682.35 points to 15,926.75. The mid-cap and small-cap indices also took a beating, with the Nifty Midcap 100 Index falling 4.3% and the Nifty Smallcap 100 Index declining 5.1%.
The IT and pharma sectors, which have been key drivers of the Indian market’s growth in recent years, were among the worst-hit. The Nifty IT Index fell 4.5%, while the Nifty Pharma Index declined 3.5%. The decline in these sectors has sparked concerns about the impact of the global sell-off on the Indian economy.
Recession fears are spreading fast, with many analysts warning of a potential recession in the US and elsewhere. The International Monetary Fund (IMF) has already warned that the global economy is facing a “delicate” situation, with rising inflation and interest rates posing a threat to growth.
The sell-off in the US markets has also had a significant impact on the rupee, which fell 1.3% to 76.24 against the US dollar. The rupee has been under pressure in recent weeks, due to a combination of factors including a widening trade deficit and concerns about the impact of the global sell-off on the Indian economy.
Despite the chaos in the markets, many analysts remain optimistic about the long-term prospects of the Indian economy. India’s GDP growth rate has been steadily increasing in recent years, and the country’s consumer and corporate sectors remain resilient.
In conclusion, the sudden sell-off in the US markets has sent shockwaves across the globe, pulling Indian indices down by over 2,200 points. Recession fears are spreading fast, and investors are bracing for continued volatility across markets worldwide. However, many analysts remain optimistic about the long-term prospects of the Indian economy, and the country’s consumer and corporate sectors remain resilient.
Source: https://www.thecore.in/podcasts/us-stocks-whacked-for-the-third-day-833088
