After a massive stock market fall in the Indian market today, India VIX, touched over 20 per cent. A higher VIX means high volatility and market uncertainty.
Indian markets experienced one of the worst falls on Monday with both the indices Nifty, and Sensex registering high losses during the opening trade. Indian stock markets followed the global bloodbath.
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The Nifty 50 index declined 414.85 points or 1.68 per cent to open at 24,302.85 points while the BSE Sensex slumped 2393.76 points or 2.96 per cent to open at 78,588.19 points.
In the broad market indices, all indices including Nifty Next 50, Nifty 100, Nifty Midcap, and Nifty Small cap declined around 2 per cent during the opening session.
Why did the Indian stock market fall massively today? Market experts have analysed the global trends and major reasons behind share market fall.
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U.S.Recession News Impact
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services told Zee Business that the rally in the global stock markets has been driven mainly by consensus expectations of a soft landing for the US economy. This expectation is now under threat with the fall in US job creation in July and the sharp rise in US unemployment rate to 4.3 per cent.
Ajay Bagga, Banking and Market Expert told ANI, ‘’”Globally markets are reacting after on Friday, the Sahm Rule got triggered, as US unemployment reached 4.3 per cent. This is predicting a US recession”.
The “Sahm Rule” is a recession indicator created and named after Claudia Sahm, a macroeconomist who worked at the Federal Reserve and the White House Council of Economic Advisers
Santosh Meena, Head of Research, Swastika Investmart told Zee Business, ‘’fears of a recession in the USA after extremely poor job data, which spooked market sentiment. China and Europe are already grappling with slowdowns, and escalating geopolitical tensions are adding further pressure on the markets.’’
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Asian Especially Japanese Stock Market Fall
In the Asian stock markets, the Japanese markets are down 20 per cent from their recent all-time highs. The Nikkei 225 index declined more than 1600 points or 4.85 per cent to 34,247.56.
The markets of Japan faced pressure after the Bank of Japan announced a well-telegraphed rate hike, which led to an unwinding of Yen Carry trades, as the Yen appreciated.
After the concerns of an economic slowdown, Asian markets extended their previous week’s fall. Also, Japanese markets had gone down nearly by 7 per cent. The concerns in the Japanese markets increased after the Bank of Japan signalled further rate hikes could be on the way.
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