A big fall has been registered in the Indian stock market today on 5th August. The signs of recession in America have played the biggest role in this. Apart from this, the effect of increasing tension between Israel and Iran is also visible on the markets. The increase in interest rates by 0.25% and reduction in bond purchases by the Bank of Japan has also affected the market. There has also been profit booking in overvalued shares.
Stock Market Crash LIVE 2024
| Topic Name | Stock Market Crash LIVE |
| Category | Trending |
| Official Website | https://examresultsindia.in/ |
| Learn Via | Mobile and Leptop , Application |
| Date | 05/08/2024 |
In view of the possibility of a possible recession in America, there is a stir in the Indian stock market. On the first trading day of the week, Monday 5th August, the Sensex fell by more than 2600 points during trading, while the Nifty also came below the level of 24000 points. Due to this huge fall, investors have suffered a loss of more than Rs 10 lakh crores.
During trading on August 5, the Sensex fell 2686 points to a low of 78295 points, while the Nifty fell 824 points to below 24000 for the first time after June 26. This is the biggest intraday fall after June 4. Let’s try to understand the reason why such a big fall happened today on August 5.
Not only the Indian stock market, but foreign markets have also seen a huge decline. A big decline has been witnessed in the stock markets from America to Japan. The Japanese stock market has fallen by 10 percent. This is the biggest decline in Japan in about 3 decades.
Fear of recession in America: The unemployment rate in America has reached a 3-year high. The unemployment rate in America has reached 4.3 percent. The economic data of America has once again intensified the discussion about the market among investors.
Impact of Japan’s Yen carry trade: With the strengthening of Japan’s currency Yen, investors in the Yen carry trade are seen reducing their positions because after the Bank of Japan raised interest rates by 0.25% and reduced bond purchases, the Yen has risen. In this situation, investors are being forced to reduce their positions to avoid losses.
Geopolitics: Geopolitical tensions weighed on market sentiment as concerns grew over potential attacks on Israel by Iran and its regional allies
Profit booking: Given the overvaluation of the stock market, many experts have been talking about a big correction. The fall on August 5 is being seen as the beginning of the correction while the June quarter results of some companies are not as per the market expectations.
Stock market crash today: BSE Sensex and Nifty, crashed in trade on Monday, on the back of growing US recession fears and global factors such as geopolitical tensions in the Middle East and worries over reverse Yen carry trade. BSE Sensex and NSE Nifty both plummeted nearly 3 percent.
Santosh Meena, Head of Research at Swastika Investmart Ltd, attributed the global market downturn to a combination of negative factors, saying, “The global market is reeling as bears enter with a cocktail of bad news.
The fear of a reverse Yen carry trade, following an interest rate hike in Japan, was the initial catalyst. This was compounded by fears of a recession in the US after extremely poor jobs data, which spooked market sentiment.”
- An over 12% plunge in Japan’s Nikkei and geopolitical tensions in the Middle East negatively impacted market sentiment.
- Asian markets, including Seoul, Tokyo, Shanghai, and Hong Kong, settled sharply lower.
- Japan’s benchmark stock index, the Nikkei, plunged 12.4% on Monday, closing down 4,451.28 points at 31,458.42. The Nikkei had dropped 5.8% on Friday, marking its worst two-day decline ever. The worst single-day rout for the Nikkei was a 14.9% plunge on October 19, 1987, during the global market crash known as “Black Monday.”
- A report on Friday showing hiring by US employers slowed last month by much more than expected convulsed financial markets. Goldman Sachs and JPMorgan have shared a bearish view on the prospects of the US economy, with a rise in the possibility of a recession.
- Goldman Sachs analysts have observed the Federal Reserve’s capacity to restore market confidence, assigning a 25% probability to a recession in the United States.
- According to JPMorgan economist Michael Feroli, “Now that the Fed looks to be materially behind the curve, we expect a 50 bp cut at the September meeting, followed by another 50 bp cut in November.” Feroli further suggested that “Indeed, a case could be made for an inter-meeting easing, especially if the data soften further,” highlighting the potential need for swift action by the Federal Reserve to address economic concerns.