Hello, There was a sharp fall in the Indian stock market today.
Around 1 pm Nifty 50 was down 2.72% and Sensex was down 2.81%.
Today we take very little time to tell you what to do or could be the reasons of today's market fall.
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So let's now come back to our topic.
The biggest reason for the decline in today's market is US's inflation figures.
The US Consumer Price Inflation (CPI) numbers were released on Friday.
US CPI inflation for the month of May 2022 has reached 8.6% which is higher than the Street expectations of 8.3%.
These inflation figures are at their 40-year high.
The numbers suggest that inflation may still not have peaked and is driven by fears of aggressive rate hikes by the US Fed in the moving markets.
Although the Fed had said in its last meeting that it would avoid large rate hikes,
but experts expect the Fed to increase the rate by 0.75% in the coming meeting.
Due to these reasons, there was heavy selling in the US markets on Friday.
Major US indices, from the Dow Jones to the Nasdaq, closed 2.7% and 3.5% down.
And its impact is also visible in all Asia Pacific markets today.
Apart from the Indian stock market, Singapore, Japan, Hong Kong, Korea, Australia and Chinese markets were also in the red.
In the US, high inflation and aggressive rate hikes could lead to an economic slowdown.
This negative GDP growth and the fear of recession are increasing.
The US 10-year government bond yield has also crossed the 3.2% level.
Due to this, the capital is flowing like equity to debt.
Inflation has also increased sharply due to the Russo-Ukraine war, rising crude oil prices and money printing by different central banks in covid.
And because of all this, FIIs are also continuously withdrawing their money from the Indian markets.
FIIs have been a constant net seller for the last 8 months and have made net sales of more than ₹3.45 lakh crore.
So these are some of the factors due to which Indian markets were trading in red today.
Now we will see through 2 clips whether inflation can be controlled in the near term and can there be a recession in the US?
In the clip, US investor, hedge fund manager and philanthropist Stanley Druckenmiller is commenting on US inflation and the possibility of a recession.
Stanley keeps a close eye on macro factors.
Talking to John Collison, founder of American fintech company Stripe.
So let's see the first clip where Stanley Druckenmiller is telling what will happen to the markets in the coming times.
Stanley predicted last year that inflation could rise in the US and that the Fed's monetary and fiscal policies were not addressing the issue.
When asked what his predictions are, for now, he said that there are a lot of uncertainties right now.
According to him, we are already in a bear market for 6 months, and the bear market will continue for some more time.
Now let's see the second clip where he is highlighting a very interesting historical fact.
When Stanley was asked whether inflation could be controlled easily in the current scenario?
So they said that according to historical data, whenever inflation in the US has gone above 5%, then there has been a recession in the US.
According to him, there is a high probability of a recession by 2023, it is difficult to predict exactly when the recession will happen.
According to him, the US has retail savings of 1.5 to 2 trillion, which way the recession may be delayed a bit.
But the US economy may face a slowdown due to factors like the ongoing bearish trend in the market, the Russia-Ukraine war,
And if there is a recession in the US, then it affects the economy of the whole world.
We have covered the topic in detail earlier in a video whose link is in the description.
So this was a small update on the Indian and US markets.
I hope you liked this small update today.
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