Indian stock market investors lose Rs 15 lakh crore as US recession fears hit global markets badly

The financial markets in India and elsewhere on Monday were rattled by developments in the US and Japan, two of the world’s leading economies with significant ties to the global financial system.

Concerns about a potential recession in the US, driven by disappointing jobs data, and the unwinding of yen carry trades, prompted by an interest rate hike in Japan, triggered sharp reactions by investors across equities, bonds, and currencies.

The Sensex fell as much as 2,686 points, or 3.3 per cent, before ending the session at 78,759 — down 2,223 points, or 2.7 per cent than Friday’s close. Similarly, the Nifty 50 dropped 670 points, or 2.7 per cent, to close at 24,048. For both indices, this was the sharpest single-day decline since the Lok Sabha election results day on June 4.

The market rout resulted in a significant erosion of investor wealth, with a loss amounting to Rs 15.3 trillion. The total market capitalisation of BSE-listed companies now stands at Rs 442 trillion ($5.27 trillion), having decreased by over Rs 20 trillion over the past three trading sessions.

The rupee, too, closed at a new low of 83.85 against the dollar, weakening by 10 paise, partially due to a substantial outflow triggered by the sharp fall in domestic equities.

Government bonds, however, saw gains as they tracked the fall in US Treasury yields, according to market participants. The 10-year government bond yield settled at 6.86 per cent, the lowest since March 31, 2022, compared to 6.90 per cent on Friday.