Market Crash: Domestic stock markets fell into heavy losses. Let’s see the reasons for throwing bear paw..
Galla S Kiran Kumar, Bureau Chief
Sensex lost 2,081 points to trade at 78,900 at 2:06 pm. Nifty lost 615 points to close at 24,101. In the Sensex 30 index, only the shares of HUL and Nestle India are in gains. Tata Motors (5.80%), Adani Ports (5.47%), Tata Steel (4.52%), SBI (4.20%), Infosys (3.87%), Maruti (3.80%), Tech Mahindra (3.54%), Powergrid (3.48%) ), shares of JSW Steel (3.38%), L&T (3.37%), Bajaj Finserv (3.30%), Reliance (3.22%) continued to bear heavy losses.
Let’s see the reasons why the indices are trapped by the bear and drowning the investors in losses..
Fears of recession in America..
US job creation in July was slower than expected. This has fueled speculations that a recession is imminent. The Labor Department revealed that only 1.14 lakh jobs were registered in non-agricultural sectors in the month of July. In fact, it was earlier estimated that it could be up to 1.75 lakhs. Statistics show that this number should be up to 2 lakhs to provide employment opportunities in line with population growth. As the actual number is much lower, there are predictions of a recession. On the other hand, the unemployment rate there has reached 4.3 percent.
Sales in Japan
The Bank of Japan recently raised interest rates by 0.25 percent. Also reduced purchases of bonds. As a result, the currency there, the yen, has strengthened. Investors started selling their shares to avoid losses. As a result, there was a sell-off in US tech stocks. Its impact is seen on the entire global markets including Asia. Japan’s Nikkei index plunged more than seven percent at one stage on Monday.
Geographical tensions
Geopolitical tensions are also affecting the markets. Markets are worried about when the confrontational atmosphere between Israel and Iran will break. According to media reports, US Secretary of State Blinken informed the G7 countries that Iran may attack Israel on Monday itself. The countries of the world are afraid of what form this war will take in West Asia, which is the center of oil.
Stocks at high values..
Indian market indices touched record highs last week. The market cap to GDP ratio, known as Buffett’s indicator, reached a record high of 150 percent. Experts say that the stocks of many companies are trading at high values. These need to be stabilized. It is explained that the correction in the market may not be missed to that extent.
Unenthusiastic quarterly results..
All the quarterly results of various companies that have come out so far have been in line with the market expectations. But, it is noteworthy that there is no positive news anywhere to cheer up the markets.
(Note: The above information is for information only. Investing in stock market is risky business. Investing is purely your personal decision.)
