Major factors for today's market mayhem
Published On: Monday, August 29, 2022 | By: Team KnowMyStock
US markets plunged sharply after Powell’s speech on Friday. The Nasdaq shed the most by falling nearly 4 percent. The futures of the frontline indices were also steeply lower in after-market hours. The same was true for Asian equities as Nikkei, Hang Seng, and Strait times indices tanked up to 2.9 percent on Monday. Fresh recession fears: The US Fed's chair not only maintained that the bank would continue with interest rate hikes but also triggered renewed fears of an impending recession in the US economy. That apart, spiraling gas prices spiral in Europe are further lending strength to fears of a recession in major Western economies. European gas prices hit a record high above €343 per megawatt hour ($100 per million British thermal units) on Friday, hinting at the stark threat to energy-intensive industries.
Risks to foreign inflows: As rate hikes are likely to remain the order of the day, a sinking rupee, and brent crude persistently around $100 per barrel levels also raise concerns about the recent strength seen in foreign flows.The rupee on Monday slumped to an all-time low of 80.14/$ and crude prices rose to $102/ bbl. Analysts said these factors weakens the case for consistent foreign inflows.
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