Mumbai: Indian markets witnessed one of the worst falls on Monday following the global bloodbath. Both the Nifty and Sensex saw high losses during the opening hours of trade. While Sensex fell 1,533.11 points to 79,448.84 in early trade, Nifty dropped by 463.50 points to 24,254.20.
Around 11 am, Sensex continued to see red and was trading at 78,815.92, down by 2166.03 points.
Smallcap and midcap stocks experienced similar losses. A potential recession in the US and growing tensions in the Middle East have caused a broad sell-off. Rupee fell to an all-time low of 83.80 against the US dollar.
What went wrong?
According to the data released post market hours on Friday US jobs growth slowed more than expected in July. These sparked fears of economic slowdown and weighed on global equities.
Experts claimed that investors across the globe are also observing the evolving situation in the Middle East. Tensions are escalating in the Middle East after the assassination of Hamas leader Ismail Haniyeh in Tehran. The initial trouble also came from fears of a reverse Yen carry trade after an interest rate hike in Japan. China and Europe are also dealing with economic slowdowns, and ongoing geopolitical tensions taking a toll on the markets.
The losers and the gainers
In the Sensex, Tata Motors, Tata Steel, JSW Steel, Adani Ports, Maruti and Reliance Industries were the biggest laggards. Sun Pharma and Hindustan Unilever were trading in the positive territory, according to reports.
What are experts saying?
Market Expert Sunil Shah said in the global market there was selling pressure because the trades were unwinding. “This will continue for some time till again things stabilise. India will be the early one to stabilise as there are a lot of foreign portfolio investors selling Indian equities. So, I think Indian markets will stabilise very early…We should not be very worried about it because there is nothing wrong fundamentally. In the last two trading sessions, what we saw was due to Japanse Central Bank raising interest. My suggestion is to look for an opportunity and if there is a deep correction, buy those shares and good companies,” he told the ANI.
#WATCH | Mumbai: On Sensex slumps by over 1600 points, Market Expert Sunil Shah says, "On the last trading day, Friday we saw a deep cut in Sensex. Today, it opened on expected line with a gap down…We are seeing in the global market that there is selling pressure because the… pic.twitter.com/X1c64kiqrI
— ANI (@ANI) August 5, 2024
Santosh Meena, Head of Research at Swastika Investmart Ltd, told the India Today that this might be the start of a significant correction in global markets after a long period of growth.He also cautioned investors to not rush into the market immediately, as better buying opportunities might come.
