The Indian equity markets tanked in early trades on August 5. While the Sensex 30 dropped more than 1,500 points, the Nifty 50 went down by about 500 points.
Several concerns
Experts listed the following factors responsible for driving the indices deep down into a sea of red – very weak Asian markets, apprehension in recession in the US, stretched valuation in the domestic market for the past several months and the lingering geopolitical concerns with the Russia-Ukraine and Israel-Hamas conflicts showing no signs of ending.
The outcome of FPIs pulling out their investments was also weighing down on the sentiment of the market.
US recession looming?
Apprehensions that the US Federal Reserve might delay its actions on a slowing US economy, the market index of Japan, Nikkei 225, is set to suffer a fall that is being touted as the biggest 2-day drop in a long time.
Japan, Korea in free fall
Zerohedge has claimed that the drop in the Japanese market index is bigger than that of the Black Monday crash of 1987.
The contagion quickly spread to neighbouring South Korea where sell orders have been frozen to arrest a crash.
Asian indices swimming in sea of red
All indices in the Asian markets – Nikkei 225, Strait Times (of Singapore), Hang Seng (of Hong Kong), Taiwan, South Korea, Indonesia – were awash in red.
The mood in the investing community turned sombre on Friday (August 2, 2024), when the US market indices and European markets all ended in the red.
US, European indices down over weekend
Dow Jones was down 320 points, S&P 500 100 points, Nasdaq almost 418 points.
Among the European indices, FTSE (of England) was down 108 points, CAC (French markets) was down 118 points and the German index DAX dropped almost 422 points.
The principal concern that triggered an avalanche of concerns was fears of apprehensions of recession in the US. The unemployment rate in the world’s biggest economy rose to 4.3%, setting in motion concerns of a recession.
A range of concerns from possible US recession to Asian markets tanking were responsible for pulling all market indices in India in the red. Not a sector escaped the red ink as trade opened on August 5. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
