Markets fall as traders hostage to global gloom
Once upon a time, traders were burdened by concern about the global economy. They bought equities and commodities in an attempt to protect their wealth and limit the damage. In recent years, that worry has gone into overdrive as anxiety levels have increased grotesquely. With uncertainty reigns supreme, traders are forced to buy whatever they can just in case it would be worth something later on.
And now, the global gloom has been taken to a new level.
“One of the few stocks that we own and have held on to is Tata Steel. It is a company that we do not see in trouble,” says Udayan Mukherjee, director at Inventure Growth Services. Mukherjee is bullish on the steel sector which he believes will benefit from infrastructure spending and increased urbanisation.
“We are very careful with our money. We are looking to take some profits as we think the markets will bounce back before long,” says another institutional trader. Commenting on the fall that has seen the Sensex slide below its opening level, he says, “The start of the session was not good for us but we have managed to survive in case of some shocks.” The rupee was also weaker – which may add to a sense of panic among traders.
The market capitalization (or market value) of a publicly traded company is calculated by multiplying the price of its stock by the number of shares outstanding. The total market capitalization of listed companies in India was US$1. 51 trillion as of 31 December 2017, about 85.4% of the size of India’s economy.
Indices are measures of performance for general equity markets and are often the reference for investment decisions. They are widely used in fund management, portfolio management, and other financial transactions to measure market performance by comparing one or more indexes against a price index. Indices were originally created in order to allow investors to compare stock prices between different companies based on various factors such as market capitalization.
The NSE 100 is an index of the top 100 companies listed on the National Stock Exchange of India, a stock market operator in India.
Currency trading is the financial trading of currencies to profit from fluctuations in their values. Besides spot and forward contracts, other derivative products such as currency options, currency futures, and currency swaps are available to investors. Foreign exchange is the trade of one currency for another at a current or determined exchange rate.
Foreign exchange market is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines the foreign exchange rate, which indicates the relative value of a particular currency. The main participants in this market are the larger international banks. Foreign exchange is traded around the clock, and it is mainly tied to the movement of global funds rather than to local demand and supply.
The National Stock Exchange index has been trading in a range between 11,700 and 11,500 over the last few weeks. While the index fell by 6.93% in last trading session, it had fallen by around 8.76% since 17 March 2018. New Delhi: The benchmark BSE Sensex on Wednesday plunged over 700 points to open 1,133 points down in early trade with the broader Nifty50 Index scaling a low of 7,813.52. The 30-share index hit a high of 11,611.72 and touched an intra-day low of 11,540.
In order to be in the Nifty 50, a company needs to fulfill several conditions: The BSE SENSEX (S&P Bombay Stock Exchange Sensitive Index) is a free-float market-weighted stock market index of 30 well-established and most liquid Indian companies. The Nifty 50 Index is the free-float market-weighted stock market index of top 50 Indian companies which have a combined capitalization of ~US$1.6 trillion.
The Nifty 50 Index remained under pressure for the second day on Wednesday with stocks slipping further below their crucial support level at 7,900 with nifty losing another 163 points to close above 7,900 mark at 7,936 levels on Wednesday.
A sell-off in global markets on Monday, with investors taking fright from the latest round of indicators showing the world economy slowing and the next recession lurking. Investors shunned riskier assets, with stocks plunging on Wall Street and Asian stocks sinking to a four-month low. The index for emerging market equities dropped to its lowest level since September 2017.
An old adage that says the market goes up when the sun shines in one country, while it falls when it rains in another country doesn’t seem to apply any more. The markets of all countries have been falling and falling and they are still falling. Some are down 5%, and others even 7%. About the only thing you are certain of is that it will go down, especially if you listen to most of the analysts. Currencies have been falling almost as fast as stocks.
-Dow drops over 700 points for the second time since September 23rd
-Markets drop on trade concerns overnight, Nikkei fell 153.29 points to 21,432.06. Global stocks plummet as Trump threatens more tariffs, the yuan falls sharply, and investors grow concerned about the strength of China’s economy. Japan’s Nikkei 225 dropped 4. 4%, the largest decline since September 23, after Donald Trump threatened to use more tariffs on Chinese imports. The yuan has plunged to its lowest level in nearly a year, hitting 31.06 per dollar for the first time since November 1 last year.
-The Dow had its worst day in two years on Monday, plunging 712 points and breaking below 24,000. The index hit a point Tuesday morning that marks the 2018 low, but it regained to close at 24,164.85 points. Monday’s drop dragged the Dow down 8% from its peak in January, wiping out all its gains for the year and making it officially in correction territory. The S&P 500 and Nasdaq Composite also fell into technical correction, down 10% from their record highs.
-Asian stocks fell after markets sank on Monday, with investors growing more worried about trade tensions and China’s slowdown. -The MSCI Asia Pacific index fell by 0.8% to 3,103.18 points, its lowest level since July 2017. The Shanghai Composite Index dropped 2% to 3,150.52 points and is down 36% from its January highs.
-It was a particularly rough day for South Korea’s KOSPI index on Tuesday as it tumbled as much as 4%, the steepest drop since October 2008. South Korea’s benchmark index closed at an all-time low, while the Korean won fell to a seven-year low, continuing a series of record losses over recent weeks that have battered the country’s stock market.
A top official at the Reserve Bank of India says the country’s economy is not likely to grow more than 7.5% in the current fiscal year and that it may slip back into a technical recession. The Finance Ministry has also warned of a slowdown in GDP growth amid weakening global demand and heightened trade tensions. Private-sector lender Axis Bank has cut its GDP growth forecast for India this fiscal year to 6.8 percent from 7%.
The Australian economy is likely to be the worst-performing in the developed world over the next two years as Donald Trump’s trade war wreaks havoc and China’s slowdown bites, according to economists. It is a far cry from the pre-financial crisis glory days when Australian prime minister John Howard dubbed his economy “the lucky country”.
