Mumbai Equity Markets Plunge Amid Global Uncertainty
Mumbai, August 5, 2024 — The Indian equity market experienced a sharp decline in early trading on Monday, reflecting the pronounced weakness observed in global financial markets. The BSE Sensex and NSE Nifty, the benchmark indices for the Indian stock market, both plummeted in response to mounting fears surrounding a potential slowdown in the US economy and a wave of foreign fund outflows.
In early trade, the 30-share BSE Sensex fell dramatically by 2,401.49 points, or 2.97%, to reach 78,580.46. Concurrently, the NSE Nifty tumbled 489.65 points, or 2.09%, to 24,228.05.
Among the major laggards within the Sensex index were prominent companies such as Tata Motors, Tata Steel, JSW Steel, Adani Ports, Maruti, and Reliance Industries, all of which experienced significant declines. Conversely, Sun Pharma and Hindustan Unilever were among the few stocks showing positive movement.
Asian markets mirrored the global downturn, with Seoul, Tokyo, and Hong Kong all trading sharply lower. However, Shanghai’s market showed some resilience, quoting higher.
The downturn in Indian equities follows a pronounced drop in US markets on Friday, driven by concerns over economic performance. “The rally in global stock markets has been primarily fueled by expectations of a soft landing for the US economy. This expectation is now under threat due to a decline in US job creation for July and a notable increase in the US unemployment rate to 4.3%. Additionally, escalating geopolitical tensions in the Middle East are contributing to market instability,” commented V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Foreign Institutional Investors (FIIs) contributed to the bearish sentiment by offloading equities worth Rs 3,310 crore on Friday, exacerbating the market’s downward trajectory.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, noted, “The unexpected weakness in the US July jobs report has heightened market anxiety, suggesting that volatility will remain a significant factor today.”
In the commodities market, global oil benchmark Brent crude saw a modest increase of 0.35%, trading at USD 77.08 per barrel.
The previous trading session saw the BSE Sensex closing at 80,981.95, a decline of 885.60 points or 1.08%, while the NSE Nifty ended at 24,717.70, down by 293.20 points or 1.17%.
As global economic uncertainties continue to loom, market participants are advised to remain vigilant and closely monitor the evolving financial landscape.
