Global Market Crash: US Recession Fears Shake Financial Markets Worldwide

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Overview



Global financial markets experienced a significant downturn on Monday, driven by fears of a US recession and escalating geopolitical tensions in the Middle East. Major indices, including India's Sensex and Nifty 50, saw heavy sell-offs, reflecting widespread investor anxiety.

Indian Stock Market

Indian benchmark indices, Sensex and Nifty 50, witnessed a dramatic decline of over 3% each. Sensex dropped 2,450.32 points (3.03%) to 78,531.63, and Nifty 50 fell 696.35 points (2.82%) to 24,021.35. The market capitalisation of BSE-listed companies fell by nearly ₹15 lakh crore, from ₹457 lakh crore to approximately ₹442 lakh crore.

Tanvi Kanchan, Head of UAE Business & Strategy at Anand Rathi Shares and Stock Brokers, commented, "This sell-off is short-term volatility due to profit booking and does not indicate long-term panic. Investors should consider staggered entries during volatile periods."

Asian Markets

Asian markets also felt the impact of the sell-off:

  • Japan: The Nikkei 225 index plunged 12.40% (4,451.28 points) to 31,458.42, while the Topix index fell 12.23% (310.45 points) to 2,227.15. The yen strengthened to 141.73 against the dollar, the highest since early January.
  • South Korea: The Kospi index dropped 8.1% before a 20-minute trading halt due to circuit breakers, and the Kosdaq declined 11.71%.
  • Taiwan: The Taiwan Weighted Index fell more than 8%.
  • Hong Kong: The Hang Seng index decreased by 1.61%.
  • China: The CSI 300 index fell by 0.48%.

US Stock Futures

US stock futures mirrored the global downturn, with Nasdaq 100 futures dropping over 6%, S&P 500 contracts down more than 3%, and Dow Jones futures falling over 1%.

Bond Market

Indian government bond yields decreased, tracking a sharp decline in US Treasury yields. The domestic 10-year yield fell to 6.8597%, the lowest since March 2022. US 10-year yields also dropped significantly, last seen at 6.7565% in Asian hours.

Currency Market

The Indian rupee hit a record low of 83.82 against the US dollar, reflecting the broader market sell-off. The Japanese yen, a safe-haven asset, strengthened to 143 against the dollar, driven by recent interest rate hikes by the Bank of Japan.

Cryptocurrencies

Cryptocurrencies suffered heavy losses, with Bitcoin prices falling around 15% to $51,323.58. Ethereum also saw a significant decline, dropping 22.3% to $2,262.

Gold Prices

Gold prices rose on Monday due to increased safe-haven demand. Spot gold climbed 0.14% to $2,446.83 per ounce, while US gold futures rose 0.8% to $2,488.50. MCX gold traded 0.19% higher at ₹69,925 per 10 grams, while MCX silver fell 0.39% to ₹82,168 per kg.

Conclusion

The global financial markets are undergoing significant stress due to fears of a US recession and geopolitical tensions. Investors are advised to exercise caution and consider expert advice before making investment decisions.

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