Global Markets Fall: Most of the recession news is coming from America. A data spurred the recession news. The weak manufacturing (PMI) data released in the US has created a stir. Here the manufacturing index for July was 46.8%, which is alarming.
The American stock market fell sharply
There was an uproar in the American stock market due to which a sharp fall was recorded. Shares of American technology giant Nvidia fell nearly 7 percent. The biggest declines are seen in shares of companies that are working more on AI. Meanwhile, Intel has decided to cut 15,000 jobs to save $10 billion by 2025.
Most of the recession news is coming from America. A data spurred the recession news. The weak manufacturing (PMI) data released in the US has created a stir. Here the manufacturing index for July was 46.8%, which is alarming. A manufacturing index below 50 percent is not considered a good sign. Let us tell you that Peter Cardillo of Spartan Capital Securities, LLC, an American wealth management and equity research company, has blamed economic concerns for the slowdown. Apart from this, the higher than expected unemployment rate in the US put pressure on the stock market. US dollar rates and Treasury yields have also increased.
Meanwhile, Europe is witnessing a decline in inflation figures. This has increased uncertainty over whether the European Central Bank will cut interest rates in September after June. Due to these related concerns, both Frankfurt and Paris stocks closed in the red with declines of more than 2 percent.
Now interest rates have increased in Japan too
The Japanese central bank has decided to raise interest rates after July 2024. The Bank of Japan said it has decided to raise interest rates to 0.25 percent. Earlier, the central bank interest rate in Japan was 0.10 percent. The Nikkei (Japanese stock market) fell 5 percent due to Japan’s decision. On the other hand, Hong Kong, Sydney, Seoul and Taipei fell by more than 2 percent, while Shanghai, Jakarta, Wellington, Singapore and Manila also closed in the red.
Geopolitical tensions are also a factor
Apart from this, there are concerns about supply disruptions in the Middle East, with crude oil prices continuing to fall. Because the demand in China has decreased. Due to which the mood of the market deteriorated. News of tensions between Israel and Iran have heightened geopolitical tensions and soured the investment climate.
Sudden decline in Indian stock market too
Meanwhile, the Indian stock market fell sharply on Friday. The Sensex fell 885.59 points to close at 80,981.95 points. The Nifty closed down 293.20 points at 24,717.70. BSE’s market cap on Friday fell to Rs. 4.56 lakh crore reduced to Rs. 457.06 lakh crores.
The main reason for the decline in the Indian market is the weak guidance provided by the auto industries. The sales of all leading auto companies were affected in the month of July. Along with this, the first quarter results have also seen a lot of pressure. Maruti Suzuki and Tata Motors have indicated that sales will be affected in the coming months. Because of this, the shares of Tata Motors and Maruti Suzuki fell by more than 4 percent. While M&M’s shares fell nearly 3 percent.
