Indian stock market Crash: US Recession Fears Impact Asian Markets and Crypto Prices

Indian stock market Crash: On Monday, the Sensex and Nifty 50 experienced a significant sell-off as global equity routs deepened due to US recession fears and rising geopolitical tensions in the Middle East.

Indian stock market benchmarks, Sensex and Nifty 50, saw a significant sell-off on Monday as the global equity rout intensified, driven by US recession fears and escalating geopolitical tensions in the Middle East.

The global markets took a dive as concerns grew over a slowing US economy and the Federal Reserve’s lagging policy support. Recent data indicating a weakening US job market triggered a closely watched recession indicator.

“This sell-off reflects short-term volatility and profit-taking rather than a long-term panic in Indian equities,” said Tanvi Kanchan, Head of UAE Business & Strategy at Anand Rathi Shares and Stock Brokers. “For investors considering entering the equity market, a staggered entry during volatile periods might be a prudent strategy.

The effects were felt worldwide, impacting everything from Asian equity markets to currency exchanges and Bitcoin prices. Here’s a snapshot of global markets:

Indian Stock Market Crash

Benchmark indices Nifty 50 and Sensex plunged over 3% each as the sell-off intensified across the board. The Sensex fell by 2,450.32 points, or 3.03%, ending at 78,531.63, while the Nifty 50 dropped 696.35 points, or 2.82%, to 24,021.35.

In a single session, investors saw a loss of nearly ₹15 lakh crore, with the total market capitalization of BSE-listed companies declining from approximately ₹457 lakh crore to around ₹442 lakh crore.

Asian Markets

Japan’s stock market plummeted, with benchmark indices dropping over 20% from their record highs, officially entering a bear market as the sell-off extended from last week.

The benchmark Nikkei 225 index dropped 12.40%, or 4,451.28 points, to 31,458.42, marking its largest points decline in history. Meanwhile, the broader Topix index fell 12.23%, or 310.45 points, to 2,227.15.

A strengthening yen further pressured the Japanese stock markets. The yen surged to 141.73 against the dollar, its highest level since early January, up from 146.52 yen in New York on Friday.

In other Asian markets, South Korea’s Kospi plummeted 8.1% before trading was halted for 20 minutes due to circuit breakers. The Kosdaq dropped 11.71%.

Taiwan’s benchmark Taiwan Weighted Index fell over 8%, driven by sell-offs in technology and real estate stocks. The Hong Kong Hang Seng Index decreased by 1.61%, while mainland China’s CSI 300 declined by 0.48%.

US Stock Futures

US stock futures fell after Wall Street’s recent decline pushed the Nasdaq Composite into correction territory. Nasdaq 100 futures dropped more than 6%, S&P 500 contracts fell over 3%, and Dow Jones futures plunged over 1%.

Bond Market

Indian government bond yields fell on Monday, tracking a sharp drop in US counterparts as expectations for aggressive rate cuts by the US Federal Reserve increased.

The domestic benchmark 10-year yield was at 6.8597%, its lowest level since March 31, 2022, down from the previous close of 6.8945%.

US Treasury yields plummeted on Friday, with the 10-year yield reaching its lowest level since December. The yield extended its decline into Asian hours on Monday, last recorded at 6.7565%, while the 2-year yield stood at 3.8216%, according to Reuters.

Currency Market

The Indian rupee fell to an all-time low on Monday, pressured by the stock market crash and concerns over a US recession, which led to outflows from local equities amid a global stock sell-off. The rupee dropped to a record low of 83.82 against the US dollar and was last quoted at 83.8125, a decrease of about 0.1% from its previous close of 83.75 on Friday.

The Japanese yen, a safe-haven asset and popular for carry trades, traded at 143, up 2.3% against the dollar, reaching levels last seen on January 2, according to Reuters. The yen has surged 10% against the dollar in just over three weeks, partly due to the Bank of Japan’s interest rate hike last week and the unwinding of yen-funded carry trades.

Cryptocurrencies

Cryptocurrencies faced significant selling pressure on Monday amid global market risk aversion, with Bitcoin prices dropping around 15%. Bitcoin traded 15.5% lower at $51,323.58, adding to a 13.1% decline last week—the worst since the collapse of the FTX exchange. Ethereum fell 22.3% to $2,262, with most other major cryptocurrencies also deeply in the red.

Gold Rate Today

Gold prices rose on Monday due to safe-haven demand amid a risk-averse global financial market. Spot gold increased by 0.14% to $2,446.83 per ounce, recovering from an earlier 1% drop. US gold futures gained 0.8% to $2,488.50.

On the MCX, gold traded 0.19% higher at ₹69,925 per 10 grams, while silver prices fell 0.39% to ₹82,168 per kg.