India’s benchmark India’s benchmark Sensex plunged 356 points on Monday, tracking a global-sell off with investors ditching shares and piling into the safety of bonds on concerns over slowing global growth and fears of a US recession.
The BSE Sensex tumbled below the 38,000 level to end at 37,808.91 while the wider NSE Nifty plunged 102.65 points to 11,354.25. The Sensex has now lost over 575 points in two sessions. Weak economic data from Europe triggered a worldwide sell-off on Friday which worsened after more disappointing numbers from US came in, fanning global growth fears. The US yield curve inverted on Friday for the first time since mid-2007, the strongest indication of a possible recession for the world’s largest economy.
Most other Asian markets ended sharply down. Japan’s Nikkei plunged 3.01 per cent, Hong Kong’s Hang Seng declined 2.15 per cent and Shanghai Composite Index edged lower by 1.97 per cent. Singapore’s Straits Times Index fell 1.27 per cent, while Korea’s KOSPI tumbled 1.92 per cent. Taiwan too dropped 1.50 per cent. Trade tensions between the US and China too added to the worries. Besides, investors preferred to keep their portfolios at a low ebb ahead of fiscal 2018-19 coming to an end.
Concerns reign over slowing growth, globally
Sensex joined a global sell-off as markets worldwide fell on concerns over slowing global growth and fears of a US recession. Weak economic data from Europe triggered sell-off which worsened after more disappointing numbers from US came in. The US yield curve inverted on Friday for the first time since mid-2007, the strongest indication of a possible recession for the world’s largest economy.
Jagannadham Thunuguntla, head of research (Wealth), Centrum Broking, said, “The inversion of US bond yield curve (between 3 months and 10 year) has led to concerns of possibility of US recession. Further, the macro-economic readings such as PMI from Germany and France have not helped.” “Going forward, the central bankers reaction to this imminent global slowdown (in terms of easy monetary policy, etc), upcoming corporate results season and political dynamics will hold the key,” he said.
Sector-wise, the BSE realty index emerged as the worst performer by sliding 1.83 per cent, followed by metal 1.30 per cent. Oil and gas gained 1.40 per cent and PSU 0.91 per cent. The BSE small-cap index fell by 1.16 per cent and mid-cap gauge by 1.06 per cent.