Before, Wall Street equities dropped as poor manufacturing information made investors cautious over a possible recession in the United States.
Mumbai/New Delhi:
It is indicated that the Indian stock market today opened lower with the Sensex down over 700 points and the Nifty down more than 200 points owing to the poor leads that prevailed from the global markets.
Earlier, a slide on the Wall Street ensued due to low manufacturing figures, which fueled the recession in the US. European stocks also declined as bad news from banks pulled down their earnings.
On the same, the Dow Jones index was down 1.60%, while NASDAQ was down 2.03%. The Nasdaq Composite dropped the most at 2.3%. On the same, US equities opened higher following a suggestion by Federal Reserve Chair Jerome Powell of a rate cut in September, the first in four years, it must be noted.
It, however, declined after the July manufacturing index (at 46.8%) missed the analysts’ expectations.
Peter Cardillo of Spartan Capital said the decline was due to fears over economic growth and also remarked that initial unemployment claims were better than expectations.
“The market might be beginning to have relatively high risk aversion, and it may apprehend that the economy is decelerating, potentially even in a recession sometime between eight and 12 months from now.”
The US markets are now expecting yet another volatile economic data, that is, the monthly jobs data is expected on Friday.
In the UK, the Bank of England, for the first time since the start of the pandemic, reduced the main interest rate. It has subsequently brought down the interest rates to a). It averted the pound to a decisively worse spot, but London stocks still plummeted.
Europe has been seeing the inflation data down, and the European Central Bank may cut interest rates in September following a similar action in June.
