Global markets tumbled heavily on Monday on fears of US economic slowdown hitting financial markets worldwide. Heavy selling pounded key Asian markets as Japan slid 10 per cent, Seoul dropped by more than 8 per cent, Taipei shed 4.43 per cent, Jakarta fell nearly 2 per cent and Hong Kong and Shanghai dropped 1.43 per cent and 0.83 per cent respectively.
According to South Korea's Yonhap news agency, trade in the local benchmark KOSPI 200 index was temporarily suspended for five minutes due to its sharp crash.
Stocks in the US also closed on a negative note for the second straight session. The Dow Jones Industrial Average lost 1.51%, while the technology heavy Nasdaq Composite lost 2.43%.
The report said that the disappointing jobs report, which triggered investor concerns about a possible recession in the world's largest economy, was what precipitated investors' worst fears.
Domestic stock markets opened sharply lower on Monday in sync with the global trend. At 11 am, the Sensex fell 2,183 points or 2.70% to 78,798, while the Nifty declined 657 points or 2.66% to 24,061.
The global market is bleeding on the back of a wave of bad news. The initial trigger was an interest rate hike in Japan, where fear of a reverse Yen carry trade gripped. This has been exacerbated by recession fears in the USA following very poor job data, which has unsettled market sentiment," says Santosh Meena, Head of Research, Swastika Investmart.
Experts commented, "The recent rebound in global equity markets had hinged significantly on hopes of a soft landing by the US economy. This is now at risk following the slide in US job creation in July and the surprise surge in the US unemployment rate to 4.3%. Geopolitical tensions in the Middle East have also roiled sentiment."
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