S&P Tumbles 6% as Global Sell-off Jolts Indian Markets
The global financial markets have been witnessing a chaotic ride in recent days, with the S&P 500 index plunging a staggering 6% on Wednesday, marking its worst day since March 2020. The sell-off has triggered a global rout, with Indian indices following suit, and the Sensex plummeting over 2,200 points. The recession fears are spreading fast, and IT and pharma stocks are taking a hit. With the Nasdaq now in bear territory, investors are bracing for continued volatility across markets worldwide.
The S&P 500’s 6% drop was its largest single-day decline since March 16, 2020, when the pandemic was unfolding. The index has now fallen around 12% from its record high, reached just a week ago. The Dow Jones Industrial Average also plummeted 4.2%, while the Nasdaq Composite slid 5.5%. The markets have been under pressure due to rising concerns over inflation, interest rates, and the slowing pace of global economic growth.
Indian markets were not immune to the global sell-off, with the Sensex crashing 1,911 points, or 3.3%, to close at 56,113. The Nifty 50 index also plummeted 574 points, or 3.2%, to 16,833. The broader market was also impacted, with the BSE Midcap index falling 3.5%, and the Smallcap index declining 4.1%.
The IT and pharma sectors were among the worst performers in the Indian market, with stocks such as TCS, Infosys, and Wipro falling between 3-5%. The pharma sector, which has been a key performer in recent years, also saw significant losses, with stocks such as Sun Pharma, Dr. Reddy’s, and Lupin declining between 4-6%.
The sell-off in the Indian markets was triggered by a combination of factors, including the global sell-off, concerns over the rising Omicron variant of the coronavirus, and the impact of the ongoing lockdowns in several states. The market was also reacting to the Reserve Bank of India’s (RBI) decision to keep interest rates unchanged, which was seen as a surprise by many analysts.
The global sell-off has been driven by a number of factors, including the rise in bond yields, the slowing pace of economic growth, and the increasing concerns over inflation. The US 10-year Treasury yield rose to its highest level in over a year, while the Eurozone’s inflation rate hit a record high. The market is also reacting to the increasing tensions between Russia and Ukraine, which has led to concerns over a potential conflict.
The IT and pharma sectors have been significant contributors to India’s economic growth in recent years, and any decline in their stock prices can have a significant impact on the broader market. The sectors have been facing challenges such as rising costs, increasing competition, and the impact of the pandemic on global trade. The decline in their stock prices is likely to be a concern for the government and the RBI, which is expected to take steps to stabilize the market and support the economy.
In conclusion, the global sell-off has sent shockwaves through the Indian markets, with the Sensex and Nifty 50 indices plummeting to their lowest levels in over a year. The IT and pharma sectors have been the worst performers, and the market is bracing for continued volatility in the coming days. The government and the RBI will need to take steps to stabilize the market and support the economy, and investors will need to be cautious in the current market environment.
Source: https://www.thecore.in/podcasts/us-stocks-whacked-for-the-third-day-833088
