The stock market crashed on Monday and there was panic among investors. Bombay Stock Exchange’s 30-share Sensex was trading down by 2600 points, while National Stock Exchange’s Nifty was down by more than 700 points. The reason for this fall in the stock market is being attributed to the turmoil in the US. Let us understand in 5 points what exactly happened in the US, due to which the Indian stock market collapsed?
Investors suffer a loss of Rs 18 lakh crore!
First of all, let’s talk about the latest situation of the stock market, so let us tell you that the BSE Sensex opened with a fall of about 1300 points and within no time it slipped more than 2400 points to the day’s low of 78,295.86. On the other hand, the Nifty also fell by 720 points and broke below the 24,000 level to 23,893.70. Due to the stock market crash, investors’ money worth about Rs 17 lakh crore was wiped out in a jiffy. BSE MCap fell to Rs 440 lakh crore compared to Rs 457.16 lakh crore last Friday.
Foreign markets collapsed in no time
There has been a huge devastation not only in the Indian stock market but also in foreign markets. There has been a big decline in the stock markets from America to Japan. Japan Stock Market has fallen by 10 percent. This is the biggest decline in Japan in about 3 decades. On the other hand, Dow Jones slipped by 1.51 percent, while Nasdaq Composite saw a huge decline of 2.43 percent. Not only this, S&P 500 also fell by 1.84 points.
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What exactly happened in America?
Now let’s talk about what has happened in America, due to which the Indian stock market seems to be in a crash. So let us tell you that after the fear of recession in America, the market suffered a big loss on Friday, while on the other hand, apart from the delay in policy rate cuts in America, heavy selling in AI and chip stocks was also one of the major reasons for the decline. Especially the effect of this turmoil in America is visible in the markets of the world including India.
These are the 5 major reasons for the fall in the market along with the sound of recession in America…
primary reason- The unemployment rate in America reached a 3-year high. The unemployment rate in America has reached 4.3 percent, which is the highest unemployment figure in America since October 2021.
Second reason- There has been a big drop in the manufacturing PMI data in the US. Due to a decrease in new orders, the US Manufacturing PMI has fallen to an eight-month low in July. According to the Institute for Supply Management (ISM), it came down to 46.8 in July, which is the lowest reading since November, while it was 48.5 in June.
Third reason- There is an atmosphere of layoffs in American IT companies. There has been a stir in many big companies and the global IT sector is under pressure due to the announcement of layoffs in the IT sector.
Fourth reason- The Japanese currency Yen has shown strength against the US Dollar. In such a situation, not only has the threat of ending the Yen Carry Trade in Japan increased, but the possibility of increased selling has also deepened.
Fifth reason- Apart from all these reasons, global tension is also seen affecting the stock markets around the world. This includes the possibility of increasing tension between Israel, Hamas and Iran.
(Note- Before making any investment in the stock market, please consult your market experts.)
Source (PTI) (NDTV) (HINDUSTANTIMES)