New Delhi:
In the US, there has been a tremendous recovery in the stock market of Japan amidst the upheaval over tariffs. On Monday, where Tokyo’s Nikkei index fell 7.8%, it made a strong comeback on Tuesday morning and traded with a gain of about 6%. The Nikkei 225 index climbed 5.81% or 1,809.92 points to 32,946.50. The Topix index also showed 6.20% or 141.82 points at 2,430.48.
South Korea’s KOSPI index was also trading up about 2%. It is clear from this that after the major decline in America’s market, there is some relief in Asian markets.
Wall street declines, but recovery in Asia
On Monday, America’s stock markets saw a big decline. Dow jones fell at 349 points i.e. 0.91% to close at 37,965.60. S&P 500 also fell 0.23% to close at 5,062.25. The NASDAQ showed a slight lead and closed at 15,603.26.
Investors scared by Trump’s announcement to increase tariff
Due to the concerns of trade war, fear of economic recession and tension of inflation, the US market saw a sharp decline. The announcement of increasing the tariff of US President Donald Trump further scared the investors. Last week, Trump announced a tariff on all imports, causing heavy selling in Wall Street and a value of about 5 trillion dollars was cleared from the market.
S&P 500 saw a decline of 10.5% in just two days, which is the biggest two -day decline after March 2020. Dow Jones has gone into correction, that is, it has come down 10% from its previous high. Nasdaq has already fallen more than 20% from its peak.
Positive sentiments shown in Asian Market
However, after a huge decline in US markets, Asian markets breathed some relief on Tuesday. Shares of Japan and Australia showed good recovery. The impact of Japan’s boom also showed on other Asian markets. Trading Futures S&P 500 and NASDAQ 100 in the US also opened with more than 1% on Tuesday.
At the same time, there are signs of decline in Hong Kong markets as a gauge of Chinese shares listed in US had fallen more than 5%. The reason for this is that Trump is threatened with a new tariff of up to 50% on China.
Trade war still remains intact
Trump has made it clear that he is not currently in the mood to stop the tariff plan. However, he definitely said that he is ready for talks. He also said that he is not responsible for the market decline. “Sometimes medicine is required to cure something.” Here he has described tariffs as medicine.
Analysts of Wall Street say that the market direction will depend entirely on the news coming from Washington. A report said that Trump could consider stopping the tariff for 90 days, causing recovery in the market for a while, but the White House immediately dismissed the report and the market went down again.
Suspense remains intact at interest rates
Traders are now betting on how much the Federal Reserve (US Federal Reserve) will cut interest rates this year. According to the current signal, starting from June this year, the rate may be cut three times this year. Apart from this, Investors are also keeping an eye on consumer price reports like Fed Chairman’s spit and upcoming economic data, so that they can understand how serious the signs of recession are.
What will be the effect on the Indian market?
The impact of recovery of Japan and Asian markets can also be seen on the Indian stock market. The global sentiment remains negative due to a huge decline in the US markets and the tariff plans of the Trump, but the Asian markets have rapidly hoped that Indian markets can also try recovery on Tuesday. However, there are still fears of trade war and global recession.
While there is a huge decline and uncertainty in the US markets on the one hand, on the other hand Japan and the rest of the Asian markets have given a positive signal by showing recovery. But as long as the news related to trade war and tariffs continues, there will be fluctuations in the global market.