Stock Market Crash Today: Bloodbath on Dalal Street as Sensex crashes by nearly 2,400 points amid recession fears in US

Stock Market Crash Today: Globally, investors have turned risk averse after a softer-than-expected jobs report in the US heightened worries over slowing economic growth.

Stock Market Crash Today: While Indian stocks fared relatively better than its Asian peers, the rupee fell to a record low and bond yields dropped to their lowest in 2 years.

The Domestic stock market plunged over 2 per cent on Monday on heavy selling by investors after weak jobs data in the US raised worries over slowing economic growth in the country. Benchmark indices Sensex and Nifty have fallen for the second consecutive day.

How much have Sensex and Nifty plunged?

Market barometers Sensex and Nifty saw massive selling in the early morning trades on Monday. The BSE’s 30-share Sensex tanked nearly 2.95 per cent, or 2,393.76 points, to open at 78,588.19. It hit a low of 78,580.46 in early morning trades.

The broader Nifty 50 declined nearly 2 per cent, or 414.85 points, to open at 24,302.85. It fell to a low of 24,077.90 in early trades.

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In the last two trading sessions, Sensex has plummeted 4 per cent or 3,287.09 points and the Nifty has declined 3.27 per cent, or 818.4 points.

Among the BSE and NSE companies, the majority of firms were trading in red in morning trades.

Why has the stock market crashed today?

Globally, investors have turned risk averse after a softer-than-expected jobs report in the US heightened worries over slowing economic growth.

The unemployment rate in the US rose to 4.3 percent in July, and nonfarm payroll employment edged up by 114,000, stoking fear of a deteriorating labor market and a slowdown in the economy.

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“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,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Nomura in a report said that the July employment report in the US showed rapid cooling in the labor market. The data appear noisy, but the balance of risks has skewed to the downside.

“Beyond the headline miss in job gains and the unemployment rate, the household survey indicated a rise in job losses, typically a warning sign for a pending downturn. An unusual rise in temporary layoffs and evidence of a negative weather effect raise the possibility that the rise in job losses is just a blip, rather than the start of a worsening trend,” Nomura said.

The other factor that has contributed to the fall in the market is the geopolitical tensions in the Middle East.

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How much domestic equities have FIIs sold?

As per the stock exchange data, foreign institutional investors (FIIs) offloaded Rs 3,310 crore of domestic shares on August 2. On the other hand, domestic institutional investors bought Rs 2,965.94 crore worth of shares.

According to the National Securities Depository Ltd (NSDL) data, FIIs have pulled out Rs 1,027 crore from the local equity market so far in August.