Indian stocks log their steepest fall in two months amid a global sell-off amid fear of US recession
05 August 2024 - 15:08
byBharath Rajeswaran and and Sethuraman NR
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Bengaluru — Indian shares tumbled more than 2.5% on Monday, in their steepest drop in two months amid a global sell-off on the fear of a US recession.
The NSE Nifty 50 index slid 2.68% to 24,055.6 and the S&P BSE Sensex dropped 2.74% to 78,759.4.
Investors piled out of stocks globally after a bleak US jobs report on Friday — the unemployment rate jumped to near a three-year high in July amid a significant slowdown in hiring — kindled the fear that the Federal Reserve’s delay in rate cuts may have tipped the US into a recession.
Asian stocks tanked 4.2%, Japan’s Nikkei plunged 12.4%, while European stocks fell to near six-month lows. US stock index futures tumbled, with those tied to the Nasdaq falling nearly 4%.
“Bad news is finally bad news from the US,” said Abhishek Banerjee, founder of investment advisory firm Lotusdew Wealth and Investment Advisors.
“A weak jobs report, disappointments in semiconductor earnings have all contributed to risk-off today, hurting expectations of a soft landing for the world’s largest economy.”
The Nifty 50’s momentum turned negative after 41 sessions, while volatility rose to a two-month high.
The weakness was widespread, with about 90% of all the stocks listed on the National Stock Exchange logging losses.
Among sectors, information technology companies, which earn a significant share of their revenue from the US, fell 3.26% in their worst session in a year.
The one bright spot was the defensive and more domestically orientated consumer staples companies, which accounted for four of the five gainers on the Nifty 50.
Marico rose about 1.5% to lead the eight gainers on the Nifty 100 after the cooking and hair oils maker posted a slightly better-than-expected quarterly profit.
The pile-out of equities probably helped to push the rupee to a record low, while bond yields dropped to a two-year low.
Still, Indian stocks fell less than their regional peers, which gave some analysts confidence in their medium-term prospects.
“The Indian stock market is much more resilient than other Asian and emerging markets in the face of a US downturn because the market is driven by domestic money,” said Christopher Wood, head of global equity strategy at Jefferies.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Indian shares plummet as investors drop equities
Indian stocks log their steepest fall in two months amid a global sell-off amid fear of US recession
Bengaluru — Indian shares tumbled more than 2.5% on Monday, in their steepest drop in two months amid a global sell-off on the fear of a US recession.
The NSE Nifty 50 index slid 2.68% to 24,055.6 and the S&P BSE Sensex dropped 2.74% to 78,759.4.
Investors piled out of stocks globally after a bleak US jobs report on Friday — the unemployment rate jumped to near a three-year high in July amid a significant slowdown in hiring — kindled the fear that the Federal Reserve’s delay in rate cuts may have tipped the US into a recession.
Asian stocks tanked 4.2%, Japan’s Nikkei plunged 12.4%, while European stocks fell to near six-month lows. US stock index futures tumbled, with those tied to the Nasdaq falling nearly 4%.
“Bad news is finally bad news from the US,” said Abhishek Banerjee, founder of investment advisory firm Lotusdew Wealth and Investment Advisors.
“A weak jobs report, disappointments in semiconductor earnings have all contributed to risk-off today, hurting expectations of a soft landing for the world’s largest economy.”
The Nifty 50’s momentum turned negative after 41 sessions, while volatility rose to a two-month high.
The weakness was widespread, with about 90% of all the stocks listed on the National Stock Exchange logging losses.
Among sectors, information technology companies, which earn a significant share of their revenue from the US, fell 3.26% in their worst session in a year.
The one bright spot was the defensive and more domestically orientated consumer staples companies, which accounted for four of the five gainers on the Nifty 50.
Marico rose about 1.5% to lead the eight gainers on the Nifty 100 after the cooking and hair oils maker posted a slightly better-than-expected quarterly profit.
The pile-out of equities probably helped to push the rupee to a record low, while bond yields dropped to a two-year low.
Still, Indian stocks fell less than their regional peers, which gave some analysts confidence in their medium-term prospects.
“The Indian stock market is much more resilient than other Asian and emerging markets in the face of a US downturn because the market is driven by domestic money,” said Christopher Wood, head of global equity strategy at Jefferies.
Reuters
Global market turmoil rattles SA stocks and rand
Oil prices fall on US recession fears
Gold hardly changed as profit-taking overwhelms US rate hopes
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