Mumbai (Maharashtra) [India], August 5 : Stock markets experienced a sharp decline on Monday reflecting widespread global trends.
The Sensex plunged by 2,222.55 points, closing at 78,759.40, while the Nifty fell by 662.10 points, ending the day at 24,055.60. Among the Nifty companies, only five advanced while 45 declined, underscoring the market's bearish sentiment.
Top gainers in the Nifty included Hindustan Unilever, Tata Consumer Products, Nestle India, Britannia, and HDFC Life. Conversely, Tata Motors, ONGC, Adani Ports, Tata Steel, and Hindalco emerged as the top losers.
Varun Aggarwal, founder and managing director of Profit Idea, commented on the sectoral performance. "Sector-wise, all indices ended in the red, with Nifty Realty leading the decline, falling 5 per cent. Nifty Metal, Media, and Auto indices dropped between 3-4 per cent. The decline in Indian markets is expected to persist due to multiple global headwinds. Investors are advised to be cautious, particularly in highly overbought sectors."
The downturn in Indian markets mirrored the broader global market turmoil. Asian equities tumbled, driven by fears of a slowing US economy, sustained declines in Japanese stocks, and escalating geopolitical tensions in the Middle East.
Vinod Nair, Head of Research, Geojit Financial Services, said the global market was jolted into a cautious mode by recessionary fears in the US following disappointing job statistics and an unwinding of carry trade following the rapid rise of the yen. "The effects were felt by the domestic market as well and are expected to impact in the near-term."
"Nevertheless, the market showed resilience at day's low and recovered to close above 24,000. Historically, the Indian market had showcased a solid track record of outperformance compared to the global market in the long-term. This trend is expected to stay as GDP growth is forecast to be robust for the decade aided by progressive policies, fiscal prudence, and a favourable political landscape," he added.
The global sell-off was intensified by fears of a reverse Yen carry trade following Japan's recent interest rate hike. Additionally, poor US job data exacerbated recession concerns, contributing to the market decline.
The Japanese yen's appreciation by 10 per cent against the dollar over the past three weeks has prompted investors to unwind carry trades, further contributing to global market instability.
US markets also saw sharp declines on Friday with the Nasdaq dropping 2.43 per cent to 16,776.16, nearing a 10 per cent decline from its peak.
The S&P 500 and Dow Jones fell by 1.84 per cent and 1.51 per cent, respectively. Adding to the concerns, WTI crude oil prices fell to an eight-week low amid global slowdown fears, despite ongoing geopolitical tensions in the Middle East.
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