Global Stock Markets Plunge Amid US Recession Fears and Geopolitical Tensions
Global stock markets, particularly those in Asia, experienced a significant downturn due to escalating fears of a US recession and rising geopolitical tensions in the Middle East.
The sell-offs led investors to shift from risky assets to safer havens like bonds and gold. Asian markets were hit hardest, with Japan’s Nikkei 225 plunging the most since 1987 and the tech-heavy markets in Taiwan and Korea suffering substantial losses. Taiwanese stocks have dropped about 18% since their peak in mid-July, though they remain up over 11% for the year. South Korean shares, which had been slightly positive earlier in the year, are now 6% below their starting point. India’s Sensex and Nifty fell 3% each but fared better than other Asian markets.
The global sell-off was driven by disappointing US economic data, raising doubts about the Federal Reserve’s ability to achieve a soft landing for the economy. Rising tensions in the Middle East and concerns over tech earnings further fuelled the downturn. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the global rally was based on expectations of a US soft landing, now threatened by a sharp rise in the US unemployment rate to 4.3% and falling job creation.
Japan’s market suffered additionally due to the unwinding of the Yen carry trade, exacerbating the crisis. Santosh Meena, Head of Research at Swastika Investmart Ltd., explained that the fear of a reverse Yen carry trade, triggered by an interest rate hike in Japan, initially sparked the downturn. This was compounded by recession fears in the US following poor job data. Meanwhile, slowdowns in China and Europe, along with geopolitical tensions, are adding further pressure on the markets.
Irish Samachar English News
{OR} Kindly click to follow the Irish Samachar News channel on WhatsApp
Comments are closed.