Stock market today: Indian stock market benchmarks, the Sensex and the Nifty 50 crashed over 3 per cent each on Monday, August 5. Midcap and small-cap indices cracked 4 per cent. Investors lost nearly ₹15 lakh crore in a session.
Stock market today: Indian stock market benchmarks, the Sensex and the Nifty 50, crashed over 3 per cent each in intraday trade on Monday, August 5, mirroring the global trend after the US recession fears mounted and rising tensions in the Middle East kept investors on edge.
An across-the-board selloff hit the Sensex hard. The Sensex opened at 78,588.19 against its previous close of 80,981.95 and crashed 3.3 per cent to the level of 78,295.86. On the other hand, the Nifty 50 opened at 24,302.85 against its previous close of 24,717.70 and dropped 3.3 per cent to the level of 23,893.70.
Around 12:25 pm, the BSE Sensex was 2.87 per cent down at 78,661.08, while the Nifty 50 was 2.81 per cent down at 24,024.20. The BSE Midcap and Smallcap indices were down 4 per cent each at that time.
Track all live market updates
The overall market capitalisation of the firms listed on the BSE dropped to nearly ₹440 lakh crore from nearly ₹457 lakh crore in the previous session, making investors lose nearly ₹17 lakh crore in a session.
“The global market is reeling as bears enter with a cocktail of bad news. The initial catalyst was the fear of a reverse yen carry trade following an interest rate hike in Japan. This was compounded by fears of a recession in the USA after extremely poor job data, which spooked market sentiment. China and Europe are already grappling with slowdowns, and escalating geopolitical tensions are adding further pressure on the markets,” said Santosh Meena, Head of Research, Swastika Investmart.
Here are five key factors that seem to have dealt a severe blow to the Indian stock market:
1. US Recession fears
Fears of a looming recession in the US have given a severe jolt to the risk appetite of investors globally after July payroll data last Friday showed the US unemployment rate jumped to near a three-year high of 4.3 per cent last month against 4.1 per cent in June. July marked the fourth consecutive monthly increase in the unemployment rate.
“The rally in the global stock markets has been driven mainly by consensus expectations of a soft landing for the US economy. This expectation is now under threat with the fall in US job creation in July and the sharp rise in US unemployment rate to 4.3 per cent,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
According to a Bloomberg report, Goldman Sachs economists have increased the probability of a recession in the US to 25 per cent from 15 per cent in the next 12 months.
Amid the recession fears, experts see high chances of rate cuts by the US Fed this year. Some say the Fed may cut rates cumulatively by 100 bps this year in September, November and December.
JPMorgan experts see a 50 bps rate cut in September and another 50 bps cut in November.
According to media reports, Iran has vowed to take revenge after Israel killed Hamas political chief Ismail Haniyeh. Haniyeh was killed when he was in Iran to attend the inauguration of newly elected Iranian President Masoud Pezeshkian.
As Mint reported earlier, the rising threats and provocative actions from both sides have heightened fears of an imminent war. The United States is reinforcing its military presence in the region in response to the escalating situation.
Investors across the globe are keenly observing the evolving situation. If the war escalates from the current levels, it will be hit market sentiment strongly.
The Indian stock market’s current valuation is stretched and experts say the market is ripe for a healthy correction.
Valuations in India, driven mainly by sustained liquidity flows, continue to be high, particularly in the mid and small-cap segments. The overvalued segments of the market, like defence and railways, are likely to come under pressure. The buy-on-dips strategy, which has worked well in this bull run, is likely to be threatened now. Investors need not rush to buy in this correction. Wait for the market to stabilise,” said Vijayakumar.
According to the equity research platform Trendline, the current PE (price to earnings) ratio of Nifty 50 is 23.1, above its two-year average PE of 21.9. The index’s PB (price to book) ratio, at 4.17, is slightly above its two-year average PB of 4.09.
India Inc.’s June quarter (Q1FY25) result has been mixed and failed to cheer market sentiment. As the current market valuation remains high, experts fear the earnings may not be able to sustain it.
The rally in the recent past has been supported by earnings growth, but experts see some moderation in the earnings of several sectors, which has potentially triggered some profit booking in the market.
5. Technical factor: Nifty 50 falls below 20-DMA
The Nifty 50 fell below the 20-day moving average, which signals weak market sentiment.
“Nifty has support at the budget day low of 24075, with the next support at the 50-DMA around 23900. Below this, the major support lies at the 23300 level. On the upside, 24800-25000 will remain a key resistance area,” said Meena of Swastika Investmart.
Some experts believe the market may bounce back if it closes above 24,400. However, the index could see a deeper correction if it falls below 24,000 on a closing basis.
“We expect the Nifty 50 to trade sideways or with positive bias if it closes above 24,400. A fall below 24,000 could drag it to lower levels,” said Mandar Bhojane,an equity research analyst at Choice Broking.
Disclaimer:The views and recommendations above are those of individual analysts, experts, and brokerage firms, econmics trend . We advise investors to consult certified experts before making any investment decisions.
All you need to know before market opens on Monday: Japan's Nikkei has plunged 14.7 per cent in the last three days after Bank of Japan unexpectedly raised interest on July 31. Yen up 10% in 3 weeks.
Stock market preview, Monday August 05, 2024:Equity benchmark indices are likely to open with a huge gap-down on Monday tracking weak cues from the global peers.
Stock market crash today: The Indian stock market experienced a significant downturn on Monday, with the BSE Sensex and Nifty50 indices plummeting following global market trends. The market witnessed a steep decline, with the BSE Sensex shedding over 2,600 points and the Nifty slipping below the 24,000 mark. As a result, the total market capitalization of BSE-listed companies decreased by Rs 17 lakh crore. The impact was more severe on smaller and midcap stocks.
According to Dr. V K Vijayakumar of Geojit Financial, the recent rally in global stock markets was driven by expectations of a soft landing for the US economy. However, these expectations are now being challenged by the disappointing US job creation data in July and the sharp increase in the unemployment rate to 4.3%. Additionally, rising geopolitical tensions in the Middle East and the unwinding of the Yen carry trade are contributing to the market’s concerns.
The resurgence of recession fears in the US economy, coupled with earnings disappointment by IT giants and renewed strength in the Japanese Yen has crippled global markets. That apart stock traders are also closely tracking developments in the Israel-Iran conflict.
At 07:00 AM, GIFT Nifty futures quoted around 24,350 levels– hinting at over 300 points gap-down on the Nifty 50 index.
Last week, the NSE Nifty 50 ended its 8-week winning streak with a loss of 0.4 per cent. Earlier in the week, the Nifty crossed the 25,000-mark for the first-ever time, and the Sensex had breezed past the 82,000 mark in intra-day deals.
Going ahead this week, the markets may look to consolidate owing to the gloomy global mood. On Thursday, the RBI policy decision will be in focus.
“Going forward, the chances of further consolidation seem elevated due to premium valuations, weak Q1 results, and ongoing global market consolidation. The RBI policy meeting could provide some hints towards an outlook on rates, while expectations are to maintain the status quo as of now., said Vinod Nair, Head of Research, Geojit Financial Services in a note.
The Global Market
On Friday, the US market extended losses as recession fears erupted after the nonfarm payrolls data missed expectations by a wide margin. Traders, however, are now expecting Fed to cut rates by 50 basis points (bps) in September and total of up to 100 bps by the end of this calendar year.
NASDAQ tumbled 2.4 per cent to 16,776. The S&P 500 and Dow Jones shed 1.8 per cent and 1.5 per cent, respectively.
The US 10-year bond yield plunged to 3.74 per cent. Among commodities, Gold futures hovered around $2,470 levels; while WTI Crude Oil futures dipped to $73 per barrel.
This morning in Asia, Japan’s Nikkei tanked 7 per cent to 33,370. The index has shed 14.7 per cent in the last 3 trading sessions after Bank of Japan (BoJ) unexpectedly raised interest rates to 0.25 per cent. Japan’s Nikkei is down 21 per cent from its peak hit on July 11. Meanwhile, the Japan’s currency, the YEN has surged 10 per cent in the last 3 weeks against the US dollar raising fears of further selling pressure by foreign investors.
Taiwan has plunged 6.5 per cent, Kospi has shed 4.4 per cent and Straits Times is down 3.2 per cent. Hang Seng and China’s Shanghai Composite indices are down 1.6 per cent and 0.9 per cent, respectively.
Trading strategy in Nifty for Monday, August 05 2024
Osho Krishan, Senior Analyst – Technical & Derivatives, Angel One
There have been insignificant alterations to the price action for Nifty, though the overall market breadth turned a bit exhaustive, indicating a sign of caution.
From a technical standpoint, the Nifty index continues to maintain a position above all its major Exponential Moving Averages (EMAs), with robust nearby support identified around the subzone of 24,600-24,500. Also, till Nifty remains above this level, there shouldn’t be any significant cause for concern for market participants.
On the higher end, the bearish gap on the daily chart, around 24,850-24,950, is likely to act as intermediate resistance, followed by the psychological mark of 25,000 in the near period. Moreover, a sustained breakthrough beyond this level is anticipated to catalyse the next series of rallies in the benchmark.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
Technically speaking, on Thursday, both the Sensex and the Nifty formed a spinning top candle. On Friday, they maintained below the spinning top candle’s low, indicating weakness. As a result, in the short term, 25,080 and 82,130 will act as stiff resistance for Nifty and Sensex, respectively.
On the downside, 24,600 and 24,500 will provide significant support for the Nifty, while 80,500-80,400 will act as support for the Sensex in the immediate term.
Rupak De, Senior Technical Analyst, LKP Securities
The Nifty has drifted down after forming a spinning top on the daily timeframe. The RSI indicator has turned downward, indicating a bearish crossover. The market appears to be favoring ‘sell on rise’ traders as long as it remains below 24,800. On the downside, the Nifty might drift towards 24,530 or 24,400.
Trading strategy in Bank Nifty for Monday, August 05 2024
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
The Bank Nifty is still consolidating in the band of around 51,000-52,300. Thus, it is advised to wait for a decisive breakout of this range, which will determine the further direction for the Bank Nifty.
Where is the big money moving? Here’s an update on the latest FII, DII trading activity
On Friday, foreign institutional investors (FIIs) net sold stocks worth Rs 3,310 crore. On the other hand, domestic institutional investors (DIIs) were net buyers of shares to the tune of Rs 2,965.94 crore.
In the derivatives segment, FIIs net sold 21,170 contracts of index futures for a consideration of Rs 1,394.66 crore on August 02. FIIs net sold 14,429 contracts of Nifty futures; 5,044 contracts of Bank Nifty futures and 1,708 contracts of MidCap Nifty futures.
Pursuant to which, FIIs long-short ratio in index futures stood eased to 1.8:1. This ratio implies that foreign investors hold nearly 2 long positions in index futures for every bet on the short side. The FIIs longs in index futures stood at 63.77 per cent.
Stocks in F&O ban period
Aditya Birla Capital, Birlasoft, Chambal Fertiliser, GNFC, Granules India, India Cements, IndiaMart and RBL Bank are the eight stocks in the futures & options (F&O) ban period on Monday.
Primary market update
Ola Electric IPO was subscribed up to 38 per cent on Day 1 of the offer period. That apart, Picture Post Studios and Afcom Holdings IPOs were subscribed 6.2 times and 4 times, respectively.
Ciegall IPOand Dhariwalcorp IPO will close for subscription today. The former has garnered 1.3 times subscription, while the latter has seen demand rising up to 10 times of the allotted number of shares.
Stock market crash LIVE: Sensex & Nifty at 12:25 PM
At 12:25 PM, BSE Sensex was trading at 78,627.22, dow 2,355 points or 2.91%. Nifty50 was at 24,015.20, down 703 points or 2.84%.
12:24 (IST) Aug 05
Stock market crash LIVE: Japanese government bond yields sink
Japanese government bond (JGB) yields plummeted, following the trend of declining U.S. yields amidst growing concerns of a potential recession. Investors also questioned the likelihood of the Bank of Japan (BOJ) raising interest rates again this year. The drop in U.S. Treasury yields was driven by traders’ speculation that the Federal Reserve may need to aggressively cut interest rates after weak jobs data fueled fears of a possible U.S. economic recession.
The 10-year JGB yield dropped to a low of 0.785%, a level not seen since April 9, before settling at 0.82%, down 13.5 basis points (bps). Benchmark 10-year JGB futures surged over 2 yen, triggering a temporary circuit breaker, before closing at 145.44 yen. The decline in JGB yields coincided with a sharp fall in Japanese equities, which plunged to their lowest levels since early January during the morning session.
Naka Matsuzawa, chief macro strategist at Nomura, attributed the fall in JGB yields to diminishing expectations for further BOJ rate hikes this year, suggesting that the bank may be more cautious about raising rates given the current market stress. “I think the BOJ can go back to the rate-hike path, but it’s going to be slower than previously expected,” Matsuzawa added, expecting yields to remain around current levels until equities and the yen stabilize.
The minutes from the BOJ’s June meeting highlighted the yen’s declines as a key factor in their discussions, ultimately leading to the decision to raise rates in July. Since then, the yen has appreciated rapidly, reaching a seven-month high on Monday. The 20-year JGB yield slid 12 bps to its lowest since April 19 at 1.6%, while the 30-year yield fell 11 bps to a three-month low of 1.965%. The two-year JGB yield was down 8 bps at 0.33%, and the five-year yield declined 13.5 bps to a four-month low of 0.44%.
The market capitalisation of all listed companies on BSE declined by Rs 17 lakh crore to Rs 440.16 lakh crore. The fear gauge India VIX surged 59%, seeing the biggest spike since 2015.
12:16 (IST) Aug 05
Stock market crash live LIVE: Australian shares slump over 3%; see worst trading session in over two years
The Australian stock market experienced a significant downturn on Monday, with the S&P/ASX 200 index plummeting by 3.7% to close at 7,649.6 points. This marked the worst trading session for Australian shares in more than two years, as they participated in a global sell-off of riskier assets. The catalyst for this decline was weak U.S. labour market data, which raised concerns about the possibility of a recession in the world’s largest economy. The benchmark index, which had reached its all-time high just last week, has now lost over 5% in the last two trading sessions.
Hebe Chen, a market analyst at IG, commented, “While the trigger was largely attributed to weak U.S. job data, the echo of recession calls could potentially spread worldwide.” Traders also exercised caution ahead of the Reserve Bank of Australia’s (RBA) policy decision on Tuesday, where it is expected to leave rates unchanged.
Chen further added, “Given the stubbornly high inflation in Australia, it’s nearly impossible for the RBA to adopt a softer tone in tomorrow’s meeting, further heightening concerns that the rate trajectory ahead will inevitably push the Australian economy into a hard landing.” The combination of weak U.S. economic data and the anticipated stance of the RBA has contributed to the overall negative sentiment in the Australian stock market, leading to the substantial losses observed on Monday.
12:14 (IST) Aug 05
Equity markets are reacting to economic weakness, highlighted by disappointing earnings from a few U.S. consumer-focused companies. It’s crucial to monitor these developments closely in the coming months.
Trideep Bhattacharya, President and CIO-Equities, Edelweiss MF
11:56 (IST) Aug 05
Stock market crash LIVE: Bitcoin, ether sink to multi-month lows
Bitcoin and ether experienced significant declines, reaching their lowest levels in several months. This downturn was triggered by concerns over a potential recession in the United States, following the release of weak economic data. As a result, investors sought refuge in safe-haven assets, leading to a broad selloff across financial markets. The cryptocurrency market had experienced a positive start to the year, bolstered by the U.S. Securities and Exchange Commission’s approval of an exchange-traded fund designed to track the spot prices of bitcoin and ether.
However, recent developments have seen bitcoin’s value plummet alongside other assets, including global equities, as fears of a U.S. recession loom large, compounded by escalating geopolitical tensions. Bitcoin has now lost nearly 20% of its value since its peak in March 2024.
“It’s a big reminder that Bitcoin and crypto in general are risk assets and sit at the pointy end of the risk spectrum,” said Tony Sycamore, market analyst at IG. Bitcoin’s price plunged to $53,091, its lowest point since late February, before recovering slightly to $54,112. Meanwhile, ether experienced a similar fate, dropping to its weakest level since mid-January and trading 16% lower at $2,300. Sycamore noted that bitcoin is currently testing the support level of its trend channel at the $54,000/$53,000 range and must maintain this level to “prevent further capitulation towards $48,000.”
11:47 (IST) Aug 05
Stock market crash LIVE: What should investors do?
“Broader indices traded at a negative zone, emulating the global indices after the Nasdaq and the S&P lost 3.2% in 2 trading days, post the federal reserve decided to hold interest rates. Asian stocks stumbled on the backs of US economic slowdown, an extended route in Japanese stock markets and rising tension in the Middle East.
On Monday, several regional equity indexes faced significant declines, with Japan and the tech-focused markets of Taiwan and Korea experiencing the heaviest losses, each seeing their benchmarks drop by more than 7%. The MSCI Asia Pacific Index fell by as much as 4.3%, heading towards a technical correction and threatening to wipe out all its gains for the year.
This sell off is more of a short term volatility by way of profit booking and is no indicator of any long term panic mode set in the Indian equities. For investors looking at entering the equity market, a staggered entry during volatile periods can be considered,” says Tanvi Kanchan, Head – UAE Business & Strategy, Anand Rathi Shares and Stock Brokers.
Stock market crash LIVE: Oil prices down on US recession fears
On Monday, oil prices experienced a slight decline as concerns about a potential recession in the United States, the world’s largest oil consumer, overshadowed worries about escalating tensions in the Middle East and their potential impact on supplies from the region. Brent crude futures dipped 4 cents, or 0.1%, to $76.77 a barrel, while U.S. West Texas Intermediate crude futures fell 13 cents, or 0.2%, to $73.39 a barrel.
The ongoing conflict in Gaza provided some support to prices, with Palestinian officials reporting that an Israeli airstrike hit two schools and killed at least 30 people on Sunday, following unsuccessful talks in Cairo. Israel and the United States are preparing for a significant escalation in the region after “Iran and its allies Hamas and Hezbollah pledged to retaliate against Israel for the killings of Hamas’ leader Ismail Haniyeh and Fuad Shukr, a top military commander from Lebanese armed group Hezbollah last week.” ANZ analysts noted that if the conflict intensifies, crude exports could be affected.
Despite the concerns about rising tensions in the Middle East, Brent and WTI both experienced significant losses on Friday, settling at their lowest levels since January and June, respectively. Both contracts marked their fourth consecutive week of losses, the longest losing streaks since November. The decline in oil prices was attributed to fears of a U.S. recession and OPEC+’s decision to stick to its plan of phasing out voluntary production cuts from October, which went against market expectations of a delay beyond the third quarter.
A Reuters survey revealed that OPEC oil output increased in July, despite the group’s production cuts. In the U.S., the number of active oil rigs remained steady at 482 last week, according to a weekly report by Baker Hughes. Weak economic data from around the world, including disappointing job growth in the U.S. and tepid demand faced by factories in the U.S., China, and Europe, also contributed to the downward pressure on oil prices, as concerns grew about a sluggish global economic recovery and its potential impact on fuel consumption. Additionally, slumping diesel consumption in China, the world’s largest contributor to oil demand growth, is weighing on global oil prices.
Stock market crash LIVE: BSE Sensex plunges over 2,600 points!
Picking on global cues, Indian equity markets plunged in trade on Monday. At 11:24 AM, BSE Sensex was trading at 78,309.18, down 2,673 points or 3.30%. Nifty50 was at 23,913.50, down 804 points or 3.25%.
The stock market experienced a significant downturn on Monday morning, resulting in a substantial loss of investors’ wealth amounting to Rs 9.51 lakh crore. The benchmark Sensex plummeted by more than 2,400 points, mirroring the sharp decline in global markets. As a result of the steep fall in equities, the market capitalization of companies listed on the Bombay Stock Exchange (BSE) decreased by Rs 9,51,771.37 crore, reaching Rs 4,47,65,174.76 crore (USD 5.35 trillion) during the morning trading session.
According to Santosh Meena, Head of Research at Swastika Investmart Ltd., “The global market is reeling as bears enter with a cocktail of bad news. The fear of a reverse Yen carry trade, following an interest rate hike in Japan, was the initial catalyst. This was compounded by fears of a recession in the USA after extremely poor jobs data, which spooked market sentiment.”
Meena further noted that the Indian equity markets are experiencing indications of the first significant correction in global markets following a prolonged bull run. The combination of unfavorable news from various fronts has contributed to the current market downturn, causing concern among investors and leading to a substantial erosion of wealth in the short term.
11:20 (IST) Aug 05
Stock market crash live: JPMorgan analysts bearish about the US economy
Analysts at JPMorgan were even more bearish, subscribing a 50% probability to a U.S. recession.
“Now that the Fed looks to be materially behind the curve, we expect a 50bp cut at the September meeting, followed by another 50bp cut in November,” said economist Michael Feroli.
“Indeed, a case could be made for an inter-meeting easing, especially if the data soften further — although Fed officials might worry about how such a move could be (mis)interpreted.”
Stock market crash live: What Goldman Sachs has said about US recession
The worryingly weak July payrolls report in the US saw markets price in a 78% chance the Federal Reserve will not only cut rates in September, but ease by a full 50 basis points. Futures imply 122 basis points of cuts in the 5.25-5.5% funds rate this year, and see rates around 3.0% by the end of 2025.
“We have increased our 12-month recession odds by 10pp to 25%,” said analysts at Goldman Sachs in a note, though they thought the danger was limited by the sheer scope the Fed had to ease policy.
Goldman now expects quarter-point cuts in September, November, and December.
“The premise of our forecast is that job growth will recover in August and the FOMC will judge 25bp cuts a sufficient response to any downside risks,” they added. “If we are wrong and the August employment report is as weak as the July report, then a 50bp cut would be likely in September.”
Stock market crash live: Rupee weakens
The Indian rupee weakened 0.06% versus the U.S. dollar, and quoted at 83.80 per dollar, pressured by likely outflows from local equities with the central bank intervention helping limit losses. The benchmark 10-year bond was quoted at 101.66 rupees, with the yield down 3 bps at 6.8604%, tracking the fall in US bond yields.
Stock market crash live: Global stocks trampled in stampede from US growth risk
Share markets tumbled and bonds rallied in Asia on Monday as fears the United States could be heading for recession sent investors rushing from risk assets while wagering that rapid fire rate cuts will be needed to rescue growth.
The safe haven yen and Swiss franc surged as crowded carry trades unravelled, sparking speculation some investors were having to unload profitable trades just to get the money to cover losses elsewhere. Such was the torrent of selling that circuit breakers were triggered in exchanges across Asia.
Nasdaq futures sank a deep 3.7%, while S&P 500 futures dropped 1.8%. EUROSTOXX 50 futures fell 1.3% and FTSE futures 0.8%.
Japan’s Nikkei shed a gut-wrenching 11.6% to hit seven-month lows, a scale of losses not seen since the 2011 global financial crisis. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 3.8%.
