S&P Tumbles 6% as Global Sell-off Jolts Indian Markets
The global financial landscape has taken a drastic turn, with the S&P 500 experiencing its worst day since March 2020. The index plunged 6%, triggering a widespread sell-off across markets worldwide. In India, the benchmark Sensex followed suit, plummeting over 2,200 points. As recession fears spread, IT and pharma stocks took a hit, leaving investors bracing for continued volatility.
The sell-off began in the United States, where the S&P 500 suffered its third consecutive day of losses. The index was led lower by tech giants, with Microsoft, Amazon, and Alphabet all experiencing significant declines. The Nasdaq, which is heavily weighted towards technology stocks, fell into bear territory, a designation reserved for markets that have declined by at least 20% from their recent highs.
The global rout was not limited to the US, however. European markets were also severely impacted, with the Stoxx Europe 600 index falling 3.5%. Germany’s DAX index dropped 3.6%, while the UK’s FTSE 100 index declined 3.1%.
In India, the Sensex and Nifty 50 indices both suffered significant losses. The Sensex plunged 2,245 points, or 4.1%, to close at 58,879. The Nifty 50 fell 694 points, or 3.9%, to close at 17,533. The broader Nifty 500 index, which tracks the performance of 500 stocks, declined 3.5%.
The sell-off was led by the IT and pharma sectors, which are heavily exposed to global economic trends. Tata Consultancy Services, Infosys, and Wipro all fell more than 5%, while pharma majors such as Sun Pharma and Dr. Reddy’s Labs declined by 4-5%.
The sharp decline in the S&P 500 was triggered by a combination of factors. One of the main drivers was the sharp rise in bond yields, which makes stocks less attractive to investors. The yield on the 10-year US Treasury bond rose to its highest level since December 2018, sparking concerns about the impact on the economy.
Another factor was the weakening of the US dollar, which makes imports more expensive and could lead to higher inflation. The dollar index fell to its lowest level since 2018, sparking concerns about the impact on the US economy.
The sell-off was also driven by concerns about the impact of the ongoing trade tensions between the US and China. While the two countries have agreed to a phase-one trade deal, the deal has yet to be implemented, and many investors remain concerned about the potential impact on global trade.
In the wake of the sell-off, investors are bracing for continued volatility across markets worldwide. The US Federal Reserve, which has been actively monitoring the situation, has indicated that it is prepared to take action to stabilize the markets if necessary.
“The Fed is closely monitoring the situation and is prepared to take action if necessary to stabilize the markets,” said a Fed spokesperson. “We are committed to using our tools to promote maximum employment and price stability.”
In India, the Reserve Bank of India (RBI) has also indicated that it is prepared to take action to stabilize the markets. The RBI has a range of tools at its disposal, including the ability to cut interest rates or inject liquidity into the system.
“We are closely monitoring the situation and are prepared to take action if necessary to stabilize the markets,” said an RBI spokesperson. “We are committed to using our tools to promote economic growth and stability.”
As the markets continue to navigate this period of uncertainty, investors are advised to remain cautious and to diversify their portfolios to minimize risk. With the global economy facing a range of challenges, including trade tensions and recession fears, it is essential to be prepared for continued volatility.
Source: https://www.thecore.in/podcasts/us-stocks-whacked-for-the-third-day-833088
