On Thursday, the sell-off in Indian equities intensified due to worries over slowing global growth. It escalating concerns in trading and also rising US treasury yields spooked investors across the world.
On Tuesday, the international monetary fund (IMF) downgraded its outlook for global growth from an estimated 3.9% in July to 3.7% in 2018 and 2019. On Thursday, IMF Managing Director Christine Lagarde said the global economy may not be strong enough to withstand the rising tensions.
The S&P BSE Sensex declined 2.2% or 759 points to 34001 the lowest close since April 11. In intraday trade, the index has declined as much as 1037 points to 33724. The market capitalization of the BSE listed companies witnesses an erosion of RS.2.69 trillion. The 50 share Nifty slumped 2.2% to 10234 with only nine of its component sending with gains.
Navneet Munot, executive director& chief investment officer, SBI Mutual Fund said,” Concerns about trade wars and global crude oil prices, coupled with the liquidity tightness back home, are weighing on sentiment”.
On Wednesday, US Equities plunged led by technology stocks, as increasing US Treasury yields triggered a flight of money from risky assets such as equities. The Dow Jones Industrial Average fell 832 points to below 26,000 points, the third worst point decline in history. The Nasdaq dropped more than 4%, it is the worst drop in terms of percentage since June 2016.
The dip in US equities roiled Asian markets on Thursday, with the benchmark indices in China, Japan and Hong Kong slipping at least 3.5 %. China’s benchmark equity gauge Shanghai Composite closed 5.2% lower, the biggest loss since February 2016, and ended below the psychological 2600 mark.
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