S&P Tumbles 6% as Global Sell-off Jolts Indian Markets
The global financial markets witnessed a massive sell-off on Wednesday, with the S&P 500 plunging 6% to its worst day since March 2020. The sharp decline in the US market triggered a global rout, with Indian indices following suit. The Sensex plummeted over 2,200 points, wiping out a significant portion of its gains for the year.
The sudden and dramatic fall in markets has sent shockwaves across the globe, with investors scrambling to make sense of the sudden downturn. The Nasdaq, which is known for its volatility, has now entered bear territory, adding to the sense of unease among investors.
The sell-off was triggered by a combination of factors, including concerns over the global economy, inflation, and the impact of the ongoing Russia-Ukraine conflict. The US Federal Reserve’s aggressive interest rate hike cycle has also contributed to the market’s volatility, as investors worry about the potential impact on economic growth.
The IT and pharma sectors, which have traditionally been stable and defensive, were not immune to the selling pressure. Stocks in these sectors, which are heavily dependent on the global economy, fell sharply, as investors sought safer havens. The BSE IT index fell 4.5%, while the BSE Healthcare index dropped 3.5%.
The decline in markets has left investors feeling jittery, with many wondering if the worst is yet to come. The global economy is facing multiple headwinds, including rising inflation, supply chain disruptions, and the ongoing pandemic. The conflict in Ukraine has also added to the uncertainty, as it threatens to disrupt global trade and commerce.
The Indian market, which has been one of the best-performing markets in the world this year, has been particularly hard hit. The Sensex, which had been hovering around the 60,000 level, fell sharply to close below 57,000. The Nifty 50 index, which is often seen as a benchmark for the broader market, fell 3.5% to close below 17,000.
The decline in markets has also led to a sharp increase in volatility, with the VIX index, which measures market volatility, rising to its highest level since the pandemic. The VIX index, which is often referred to as the “fear index,” measures the market’s expectations of future volatility.
The sharp decline in markets has also led to a significant outflow of foreign funds, which has added to the selling pressure. Foreign institutional investors (FIIs) have been net sellers of Indian equities for the past few days, citing concerns over the global economy and the impact of the Russia-Ukraine conflict.
The impact of the sell-off has been felt across the board, with most sectors and stocks falling sharply. The banking sector, which has been one of the best-performing sectors this year, fell 4%, while the realty sector dropped 3.5%. Stocks of companies that are heavily dependent on global trade, such as shipping and logistics companies, fell sharply, as investors worried about the potential impact of the conflict on global trade.
The sharp decline in markets has also led to a significant increase in the number of investors seeking to exit their positions. The number of sell-orders far exceeded the number of buy-orders, leading to a sharp decline in prices. The use of stop-loss orders, which are used to limit losses, also contributed to the selling pressure, as investors sought to minimize their losses.
In the midst of all this volatility, investors are bracing themselves for continued uncertainty and volatility across markets worldwide. The ongoing conflict in Ukraine, the global economy, and the impact of the pandemic are all factors that will continue to influence market sentiment in the coming days.
As the markets continue to fluctuate, investors will need to be cautious and stay informed to make the best decisions for their portfolios. It is essential to stay up-to-date with market developments and to diversify one’s portfolio to minimize risk.
Source:
https://www.thecore.in/podcasts/us-stocks-whacked-for-the-third-day-833088
