The stock markets worldwide experienced a retreat as concerns about headwinds for the US economy outweighed hopes of interest rate cuts. The Mumbai stock market tumbled over 7% as Prime Minister Narendra Modi's party did not secure the landslide victory initially expected in the Indian elections [2ef38747]. The Sensex had initially jumped over 3% on hopes of a significant majority for Modi's Bharatiya Janata Party (BJP) [2ef38747].
The global stock markets faced a decline as investors worried about the headwinds for the US economy, which overshadowed the optimism surrounding potential interest rate cuts. The concerns over the US economy outweighed the hopes of rate cuts, leading to a retreat in stock markets worldwide [2ef38747].
In Mumbai, the stock market experienced a significant decline, with the Sensex plunging over 7%. This decline was attributed to the fact that Prime Minister Narendra Modi's BJP did not secure the expected landslide victory in the Indian elections. The initial optimism surrounding the BJP's performance had caused the Sensex to surge over 3% [2ef38747].
The volatility in the Mumbai stock market was a result of the unexpected election outcome, which defied market expectations. The decline in the Sensex reflected the uncertainty and concerns among investors regarding the future direction of the Indian economy and policy reforms [2ef38747].
Despite the initial market volatility, experts believe that the market will stabilize in the coming sessions and focus on policy announcements and reforms [e89f2997].
Indian shares experienced a substantial decline due to election results, with both BSE Sensex and NSE Nifty 50 plunging over 5% from Monday's record levels. The election outcome in India defied expectations, with Prime Minister Narendra Modi's alliance winning a majority but falling short of a predicted landslide. This surprise cast a shadow over the markets, causing the rupee to drop to 83.5 per dollar and raising benchmark yields. The MSCI Emerging Markets (EM) equities index fell by 1.6%, its largest drop since mid-April, affecting markets in South Africa, Hungary, and Poland. The US dollar's appreciation, driven by concerns over the US economy's weakening manufacturing activity, added pressure on EM currencies. India's market jitters reflect broader global uncertainties impacting emerging markets. Recent declines in South African, Hungarian, and Polish markets highlight the vulnerability of these economies to political developments and US economic data. The Official Monetary and Financial Institutions Forum (OMFIF) notes a pivot among global reserve managers towards the US dollar, driven by its high yield. The value of investments and income derived from them may go down as well as up. The investments referred to in this article may not be suitable for all investors. [57b9f06f].
Investor sentiment is fragile in Asian markets due to political volatility and concerns over U.S. and global economic growth. Indian assets have been volatile in response to the country's general election result. Japanese yen is strengthening due to a safety bid. Regional stocks are down four out of the last five days. Economic calendar includes Australian GDP, revised GDP data from South Korea, service sector PMI data from Australia, China, and India, as well as inflation data from Thailand and the Philippines. Rate cut hopes are increasing as expectations for U.S. rate cuts grow. 'JOLTS' report shows job openings fell more than expected in April. Wall Street ends mostly flat. Indian markets experience volatility after exit polls suggest Prime Minister Narendra Modi would extend his majority, but it becomes clear he would lose it. Barclays analysts expect market reverberations to continue, with a premium put back into Indian bonds and the central bank maintaining its presence in the FX market. Volatility in the yen is increasing, with short-term implied volatility in dollar/yen jumping the most in a month. Japan has the potential support of the world's largest repatriation flow. Key developments for Wednesday include Australia GDP, Indian market volatility, and services PMIs from China, India, and Australia. [8137f938].
Political and market volatility are causing fluctuations in the markets. The article discusses the impact of these factors on various sectors, including the automotive industry. The author mentions the names of several radio stations and the parent company of the New Straits Times. The article also refers to the Personal Data Protection Act. The content is published on the New Straits Times website. [e3f59cad].
A transformative period may be imminent for the US and global economy — and it will bring more risk. Allison Schrager, a Bloomberg Opinion columnist and senior fellow at the Manhattan Institute, suggests that volatility is about to make a comeback in the US markets. She believes that a transformative period is on the horizon, which will bring more risk to the economy. Schrager's views are personal and do not represent the stand of the publication. The article was first published on June 13, 2024, at 04:48 PM IST. [d6ec6fe2].
Globalization and increased market and financial linkages have led to increased economic volatility worldwide. This phenomenon requires policymakers in developing countries to remain vigilant and responsive to economic events and downturns in advanced economies. The global economy has experienced a secular decline in economic growth between 1960 and 2021, with increased volatility after 2000. Regional differences in income per capita remain significant, despite expectations of economic convergence. East Asia and the Pacific have experienced the fastest economic growth over the last five decades, with low volatility. South Asia has seen improved economic growth but increased volatility in the last decade. The EU and OECD have experienced a decline in economic growth and increased volatility in the last two decades. The rise in global economic volatility is a shared phenomenon due to globalization and increased market and financial linkages. Policymakers in developing countries should factor in global economic parameters when formulating monetary and fiscal policies to cushion their economies from undesirable changes in the global economic space. Ignoring this reality can lead to severe macroeconomic instability. The ongoing macroeconomic situation in Bangladesh highlights the pitfalls of not reflecting global economic developments in domestic economic policymaking. Policymakers should proactively consider global economic trends and craft appropriate responses to protect their domestic economies. [2a5baa87].
Fergal O'Brien, head of lobbying at Ibec, warns that Ireland needs to adapt to global volatility in order to future-proof its economy. In an era of greater protectionism and retreat from globalization, Ireland cannot afford to rest on its laurels. O'Brien emphasizes the need for Ireland to stay competitive and not rely solely on its past success. He warns that if Ireland does not adapt, it will be negatively impacted by global volatility. The article also mentions other topics such as an exclusive interview with Phil Hogan, deals discussed by Luke Comer, and issues faced by Jet Blue and United at Dublin Airport. [fca876c5].