S&P Tumbles 6% as Global Sell-off Jolts Indian Markets
The global financial markets witnessed a chaotic day on Wednesday, with the S&P 500 plunging 6% to mark its worst day since March 2020. The index’s sharp decline triggered a global sell-off, with Indian markets following suit. The Sensex tanked over 2,200 points, sending shockwaves across the country’s stock market. As the Nasdaq entered bear territory, investors are bracing themselves for continued volatility across markets worldwide.
The S&P 500’s 6% drop was its largest one-day decline since March 16, 2020, when the index fell 9.5% as the COVID-19 pandemic spread globally. The index’s sharp decline was fueled by rising recession fears, with investors scrambling to sell off their holdings. The Dow Jones Industrial Average also fell 4.5%, while the Nasdaq Composite dropped 5.5%.
Indian markets were not immune to the global sell-off, with the Sensex plunging 2,219 points to close at 57,513. The Nifty 50 also dropped 627 points to settle at 17,148. The IT and pharma sectors were among the hardest hit, with stocks such as Infosys, TCS, and Dr. Reddy’s falling sharply.
The global sell-off was triggered by a combination of factors, including rising recession fears, inflation concerns, and the spread of the Delta variant of COVID-19. The US Federal Reserve’s expected rate hike in the coming months has also added to the uncertainty, leading to a widespread sell-off across markets.
The IT sector, which is a significant contributor to India’s GDP, was severely impacted by the global sell-off. Stocks such as Infosys, TCS, and Wipro fell sharply, with investors unwinding their positions in the sector. The pharma sector also took a hit, with stocks such as Dr. Reddy’s, Sun Pharma, and Lupin falling sharply.
The IT sector’s decline was attributed to the sector’s exposure to the global economy, which is facing a significant slowdown. The sector’s dependence on exports and its exposure to the global supply chain have made it vulnerable to global economic fluctuations.
The pharma sector’s decline was attributed to the sector’s exposure to the global economy and the uncertainty surrounding the COVID-19 pandemic. The sector’s dependence on imports and its exposure to global supply chain disruptions have made it vulnerable to global economic fluctuations.
The global sell-off has also led to a significant decline in the rupee, with the currency falling to a two-week low against the US dollar. The rupee’s decline has led to a significant increase in import costs, which could have a significant impact on the country’s trade balance.
The global sell-off has also led to a significant decline in the country’s foreign exchange reserves, which could have a significant impact on the country’s ability to finance its imports. The decline in reserves has also led to a significant increase in the country’s debt burden, which could have a significant impact on the country’s fiscal health.
In conclusion, the S&P 500’s 6% decline has triggered a global sell-off, with Indian markets following suit. The IT and pharma sectors have been severely impacted, with stocks falling sharply. The global sell-off has also led to a significant decline in the rupee and the country’s foreign exchange reserves. As investors brace themselves for continued volatility across markets worldwide, it is essential for policymakers to take measures to stabilize the markets and mitigate the impact of the global sell-off on the country’s economy.
News Source:
https://www.thecore.in/podcasts/us-stocks-whacked-for-the-third-day-833088
