Global markets were in the deep red on Monday as the US economic slowdown weighed heavily on the financial markets.
Heavy selling pressure was seen in all major Asian markets. Japan crashed by 10 per cent, Seoul tumbled over 8 per cent, Taipei fell by 4.43 per cent, Jakarta was down nearly 2 per cent, Hong Kong and Shanghai were down 1.43 per cent and 0.83 per cent) respectively.
South Korea’s news agency Yonhap reported that due to a crash trading in the local benchmark index KOSPI 200 index held for five minutes.
The US stocks fell for the second consecutive session on Friday last week, with the Dow Jones Industrial Average sliding 1.51 per cent and the tech-heavy Nasdaq Composite sinking 2.43 per cent.
A disappointing jobs report spurred investor fears that the world’s largest economy is headed toward a recession, the report said
Indian stock markets also opened in the deep red on Monday. At 11 a.m., the Sensex was at 78,798, down 2,183 points or 2.70 per cent, and the Nifty was at 24,061, down 657 points or 2.66 per cent.
Santosh Meena, Head of Research, Swastika Investmart said, “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 job data, which spooked market sentiment.”
“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 the US job creation in July and the sharp rise in the US unemployment rate to 4.3 per cent. Geopolitical tensions in the Middle East also are a contributing factor,” other experts said.
G7 FMs urge efforts to avoid further escalation of Middle East conflict
The foreign ministers of the Group of Seven (G7) countries urged all actors involved in the current Middle East crisis to refrain from any step that could possibly escalate the conflict further.
“We call on the parties concerned to desist from any initiative that could hinder the path of dialogue and moderation and encourage a new escalation,” the G7 Italian presidency said in a statement on Sunday.
After discussing the latest developments in a videoconference, the ministers expressed “strong concern about recent events that threaten to lead to a regionalisation of the crisis, starting with Lebanon,” according to Italy’s Foreign Minister Antonio Tajani.
The G7 extraordinary meeting was called after a recent escalation in the crisis, reports Xinhua news agency.
Tensions escalated after the assassinations of Lebanese group Hezbollah’s senior military commander, Fouad Shokor, in Beirut and Hamas’ political leader, Ismail Haniyeh, in the Iranian capital Tehran on July 31.
A few days earlier, a rocket strike in the Israeli-occupied Golan Heights had killed 12 children and teens.
Iran, Hamas, and Hezbollah blamed Israel for the killings and threatened to retaliate. Israel claimed responsibility for Shokor’s death, saying it was in retaliation to the strike in the Golan, but it did not confirm involvement in the killing of Haniyeh.
Since then, the exchange of fire and rockets ongoing across the Israel-Lebanon border has intensified, and so have the diplomatic efforts to contain the crisis.
“We reaffirmed the priority of a successful conclusion of negotiations on a ceasefire in Gaza and the release of the hostages and confirmed our commitment to intensify humanitarian aid to the populations of the Strip,” the G7 presidency stressed.
Also on Sunday, Italy’s Foreign Minister called on all Italians temporarily in Lebanon to leave the country as soon as possible due to “the worsening situation” and to all citizens to avoid travelling there. Earlier, many other governments, including those of France, the United States, Saudi Arabia, the United Kingdom and Jordan also issued advisories.
The G7 comprises Canada, the US, France, the UK, Italy, Germany and Japan. AGENCIES
