Asian Markets Sell-Off: Nikkei tanks 13%, Kospi 5% amid US recession fears

Asian Markets Sell-Off: Asia-Pacific stock markets were under intense pressure on Monday, with heavy declines across major indices. The Nikkei 225 and Topix in Japan tumbled 13 per cent, confirming a bear market and marking the worst drop since ‘Black Monday’ of 1987.

Other key Asian markets also suffered heavy losses, with South Korea’s Kospi, Hong Kong’s Hang Seng, and Australia’s ASX 200 all plunging between 3 per cent and 11 per cent. 

This sell-off extended from last week, following sharp declines on US Wall Street. Last Friday, the Nasdaq Composite fell 2.43 per cent, the S&P 500 dropped 1.84 per cent, and the Dow Jones Industrial Average decreased by 1.51 per cent, driven by a weak jobs report that heightened fears of an impending recession.

 

Geojit analysts attribute the market downturn to concerns over the Federal Reserve’s decision to keep interest rates steady, which may signal a potential economic slowdown. Traders are worried that the Fed may be slow to cut rates in response to the US economic deceleration, compounded by weaker-than-expected employment data.

Also Read: Sensex, Nifty fall today on global worries but IPO GMPs remain steady

The global market rout had a major impact on Indian stock exchanges as well. The BSE Sensex plunged 3.31 per cent, or 2,686.09 points, to an intraday low of 78,295.86. Similarly, the Nifty50 fell 3.33 per cent, or 824 points, reaching an intraday low of 23,893.70.

Individual stocks were hit hard, with Tata Motors, Tata Steel, among others, seeing declines of up to 10 per cent. 

Broader market segments also bled, with the Nifty SmallCap index falling over 4 per cent and the MidCap index slipping 3.7 per cent.

Vishnu Kant Upadhyay, AVP of research and Advisory at Master Capital Services Ltd, noted that the Indian indices have continued their decline for a second consecutive session. The Nifty50 and Sensex have dropped nearly 3.5 per cent and 4 per cent respectively from their recent highs, primarily due to global market concerns following disappointing US economic data, including non-farm payrolls, manufacturing PMI, and jobless claims.

Despite the current downturn, Upadhyay suggested that the Yen carry trade and prevailing bullish trends might support a market recovery. He views this as an opportunity to establish new long positions for long-term gains. 

On trading strategies, he recommended that the Nifty50 has major support in the 24,200-24,100 range and the Sensex around 78,400, near the 55-day EMA, indicating potential stabilisation points.