Asian Stock Markets Drop as US Payroll Growth Disappoints and Fed Meeting Looms
New Delhi, India – On Monday, Asian stock markets experienced significant declines due to lower-than-expected US payroll growth and the upcoming Federal Reserve meeting. Major indices in Japan and Hong Kong fell by over 1.50%. Japan’s Nikkei 225 index dropped by 1.84% or 632 points, while Hong Kong’s Hang Seng decreased by 1.73% or 301 points.
Experts attribute the selling pressure to concerns about economic slowdowns in China and Germany. Ajay Bagga, a banking and market expert, stated, “Eight days of volatility are assured for the markets as the Fed rate cut of September 18 comes within striking distance. The seasonality of poor September performance of markets is playing out as per expectations. On top of that, the slowdown in China and Germany is adding to global growth worries. The news of a top German car manufacturer mulling closing down car factories in Germany was symbolic of all that is troubling Germany.”
Taiwan’s major index, Taiwan Weighted, fell by more than 2%, and South Korea’s KOSPI index dropped by 1.15%. Despite the overall selling sentiment in Asian markets, experts noted that the impact on Indian stocks would be less severe due to high domestic investor buying. However, some volatility is expected.
Ajay Bagga added, “For Indian markets, the impact is coming via FII selling. The good news is that despite the net FII outflows of over Rs 5.5 lakh crore from Jan 2022 to August 2024, the Rs 11 lakh crore plus of robust domestic inflows have meant every dip has been bought into in the Indian markets. We expect a couple of weeks of this volatility, but don’t expect sharp cuts in the Indian markets given the domestic liquidity sitting on the sidelines.”
On Friday, Indian stock indices also took a hit, with all sectoral indices closing in the red. The Nifty 50 dropped by 292.95 points or 1.17% to 24,852.15, and the BSE Sensex fell by 1,017.23 points or 1.24% to 81,183.93. Ajit Mishra, SVP of Research at Religare Broking, commented, “The recent weakness in U.S. markets has stalled the momentum in Indian markets, causing participants to become cautious ahead of the upcoming jobs data.”
Doubts Revealed
Asian Stock Markets -: These are places where people buy and sell shares of companies in Asian countries like Japan, China, and India. It’s like a big marketplace for company ownership.
US Payroll Growth -: This means the number of jobs added in the United States. If fewer jobs are added, it can be a sign that the economy is not doing well.
Federal Reserve -: The Federal Reserve, or Fed, is like the central bank of the United States. It helps control the country’s money and interest rates.
Nikkei 225 -: This is a stock market index in Japan. It shows how well the top 225 companies in Japan are doing.
Hang Seng -: This is a stock market index in Hong Kong. It shows how well the top companies in Hong Kong are doing.
Economic Slowdowns -: This means that the economies of countries like China and Germany are not growing as fast as before. It can lead to fewer jobs and less money for people.
Domestic Investor Buying -: This means people in India are buying shares of companies in their own country. It helps keep the stock market stable.
Volatility -: This means that the stock market prices can go up and down a lot in a short period. It can be risky for investors.
Domestic Liquidity -: This means there is a lot of money available within India for investing. It helps keep the stock market from falling too much.