The US stock market Dow Jones fell 2748.64 points as it opened on Monday. This led to a lower circuit on the market and the business was halted for 15 minutes. Earlier on March 12, a lower circuit was put in Dow Jones. Its impact was visible on the Indian stock market the very next day. On March 13, the Sensex had fallen to 3600 points on opening and trading had to be stopped due to the lower circuit. Similar fears are being expressed this time.
Indian market becomes Bearish market
The US market is moving towards the bear market. Looking at the trends, the Indian market is also moving in this direction. The bear market is a situation when the value of an index or investment falls 20% or below the recent high. Talking about this year, the Sensex has fallen 24% so far this year. On January 1, the market opened at 41,306 points, while on March 16, the market closed at 31,309 points, which means that the market has fallen by 24% so far.
What is the reason
Recently the US Federal Reserve Bank (Fed) raised the benchmark interest rate from 0 to 0.25%. It was earlier from 1% to 1.25%. The US central bank has cut the interest rate by one percent. Earlier on March 3, the Fed cut the interest rate by 0.5%.
The Fed has also decided to inject $ 700 billion into the US economy. It has announced to buy $ 500 billion and $ 200 billion of government bonds. At the same time, the New Zealand central bank has also cut interest rates by 75 basis points on Monday after an emergency meeting. The effect of this is being seen on the Dow Jones of America.
What will be the impact on India
The US is India’s largest trading partner, so the direct impact on the US market is also visible on the Indian market. When the lower circuit was imposed on the Dow Jones last Thursday, it also saw its impact on the country’s markets. Once the market opens on Tuesday, the country’s markets may once again see a sharp decline.
