Investors witnessed a decline of ₹9.51 lakh crore in their wealth on Monday morning due to a crash in the equity markets. The benchmark Sensex plummeted over 2,400 points, reflecting a significant drop in global peers.
In early trade, the 30-share BSE benchmark experienced a sharp decline of 2,401.49 points, reaching 78,580.46. As a result of the drastic equity decline, the market capitalisation of BSE-listed firms decreased by ₹9,51,771.37 crore to ₹4,47,65,174.76 crore (USD 5.35 trillion) during the morning trade.
"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," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Indian stock markets are showing indications of the first substantial decline in global markets following a prolonged period of market growth, he stated.
Seoul, Tokyo, Shanghai, and Hong Kong experienced significant decreases in trading within the Asian markets.
The Nikkei 225, Japan's primary stock index, fell by as much as 8.1 per cent early Monday, continuing the downward trend that affected world markets last week due to concerns about the condition of the US economy.
On Friday, the US markets closed with considerable decreases.
"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 the US unemployment rate to 4.3 per cent.
"Geopolitical tensions in the Middle East also are a contributing factor," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
The biggest laggards in the Sensex pack were Tata Motors, Maruti, Tata Steel, Infosys, Tech Mahindra, and JSW Steel.
On the contrary, Hindustan Unilever, Sun Pharma, Nestle and Asian Paints were trading in the positive territory.
Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,310 crore on Friday, according to exchange data.
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