Last Updated on 02/08/2024 by wccexam Desk
Everything was fine till yesterday, but now suddenly there is talk of recession, the first effect of which or should we say panic, is being seen in the stock market. On Thursday, there was a big fall in the global market, there was an earthquake in the US stock market. On Thursday, all the three major indexes in the US closed with a huge decline. Nasdaq recorded the maximum decline of 2.3 percent.
Big fall in US stock market
Actually, there was chaos in the US stock market on Thursday, S&P 500 fell by 1.37 percent and Dow Jones fell by 1.21 percent. The stock of US giant technology company Nvidia fell by about 7 percent. At the same time, the stock of US MNC company Broadcom Inc. fell by 8.50 percent. The biggest decline is being seen in the shares of those companies which are working more on AI. Meanwhile, Intel has decided to lay off 15,000 employees to save 10 billion dollars by 2025.
The biggest news of recession is coming from America. One data has fueled the news of recession. The weak manufacturing PMI data released in America has caused an earthquake. Here the manufacturing index of July was 46.8%, which is worrying. Manufacturing index less than 50 percent is not considered a good sign. Let us tell you, Peter Cardillo of American wealth management and equity research company Spartan Capital Securities, LLC blamed economic concerns for the recession. Apart from this, the pressure on the stock market increased when the unemployment rate in America was also higher than expected. US dollar rates and Treasury yield also increased.
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Meanwhile, inflation figures are declining in Europe. This has increased uncertainty as to whether the European Central Bank will cut interest rates in September after June. Due to concerns related to this, both Frankfurt and Paris stocks closed in the red with a decline of more than 2 percent.
Interest has become so expensive in Japan now
At the same time, the Japanese Central Bank has decided to increase interest rates after July 2024. The Bank of Japan said that it has decided to increase the interest rate to 0.25 percent. Earlier, the interest rate of the Central Bank in Japan was 0.10 percent. Due to this decision of Japan, Nikkei registered a decline of up to 5 percent. On the other hand, Hong Kong, Sydney, Seoul and Taipei fell by more than 2 percent. While Shanghai, Jakarta, Wellington, Singapore and Manila also closed in the red.
Geo-political tension is also a reason
Apart from this, there is a separate concern about supply disruption in the Middle East, along with this, there is a continuous fall in the prices of crude oil. Because the demand in China has decreased. Due to which the mood of the market has deteriorated. The news of tension between Israel and Iran has increased the geopolitical tension and spoiled the investment environment.
Sudden fall in Indian stock market too
Meanwhile, a huge decline was seen in the Indian stock market on Friday. Sensex fell 885.59 points to close at 80,981.95. Nifty fell 293.20 points to close at 24,717.70. Due to the huge fall in Sensex, the market cap of BSE fell by Rs 4.56 lakh crore to Rs 457.06 lakh crore on Friday.
A major reason for the decline in the Indian market is the poor guidance given by the auto industries. In the month of July, the sales of all the major auto companies were affected. Along with this, a lot of pressure has been seen in the first quarter results as well. Maruti Suzuki and Tata Motors have indicated that sales will be affected in the coming months. Due to which the shares of Tata Motors and Maruti Suzuki fell by more than 4 percent. While the shares of M&M fell by about 3 percent.
Source (PTI) (NDTV) (HINDUSTANTIMES)