Monster of Global Growth Concern Back Again

Coming back after a short break, the Indian markets are expected to open in negative terrain this morning. The weakness of the preceding three trading sessions is likely to extend on the back of sell-off in the worldwide stock markets after the recent economic data indicates that the monster of global slowdown has come back to create an haunting presence. The SGX Nifty is currently trading down by 9 points at 11,347 levels.

The weaker western markets always have an impact on peers across the globe and the first signs are already visible in Asia. Adding fuel to the fire, as some media reports indicate, is that the US is set to slap tariffs on European Union goods. The Asian markets were seen trading in red on Thursday early morning deals with Japan’s Index Nikkei 225 being worst hit as it plunged over 2 per cent and Hong Kong’s Hang Seng having dropped 0.58 per cent. Meanwhile, markets in China are closed on Thursday.

Back home, equity indices surrendered early gains to end sharply lower on Tuesday, extending their loss-making streak to the third straight session. The biggest thorn in the flesh which saw the markets crack impulsively was that the country’s manufacturing sector activity in September remained unchanged while automotive sales across segments continued to race downhill in September. At the end of the session, the Nifty lost a per cent to close below the 11,400 mark and the BSE Sensex dropped 0.94 per cent to settle at 38,305 levels. The broader indices continued to underperform Nifty with Nifty Mid-Cap and Small-Cap plunging 1.88 and 1.18 per cent, respectively. All the sectors showed weakness; selling pressure was severe, especially in Nifty Media, Nifty Realty and Nifty PSU Bank. The advance-decline ratio was skewed toward decliners.  

The major US Indices dived into a sea of red on Wednesday with the monster of global growth concerns returning as economic reports fell short of expectations. At the closing bell, the Dow closed a good 1.9 per cent below its previous close while the S&P 500 was down by 1.8 per cent and the tech-heavy Nasdaq Composite tumbled 1.6 per cent. European benchmarks too have followed their US counterparts and finished lower. Sentiments were dampened after a disappointing economic data and also because UK’s Brexit concerns continue to fester.