Mumbai/New Delhi: The Indian stock market opened lower this morning amid weak global cues, with the Sensex nosediving over 700 points and the Nifty tumbling more than 200 points.
Earlier, Wall Street stocks tanked after weak manufacturing data sparked worries about a US recession. European stocks, too, fell after disappointing bank earnings.
In the US, all three major indices finished lower. The Nasdaq Composite fell the most at 2.3%. US equities had opened higher after the Federal Reserve Chair Jerome Powell hinted at a September interest rate cut -the first in four years. It, however, fell after the July manufacturing index (at 46.8%) failed to meet the analyst estimates.
Peter Cardillo of Spartan Capital attributed the slump to concerns over economic slowdown and noted that jobless claims topped estimates.
"The market might be beginning to fear that the economy is slowing to the point where we might be looking at a recession eight to 12 months from now," he said.
The US markets await another key economic data point - the monthly jobs data - on Friday.
In the UK, the Bank of England cut its main interest rate for the first time since the pandemic. It has reduced its borrowing costs to 5%. It saved the pound from a decisive fall, but not the London stocks.
Europe has been seeing a downward shift the inflation data has raised uncertainty over whether the European Central Bank would cut interest rates in September after a similar move in June.
Both Frankfurt and Paris stocks closed over 2% in the red.
In Asia, Tokyo led the losses amid expectations for more Japanese rate hikes. Nikkei 225 slumped over 5% at one point due to a stronger yen, which hit Japan's key export sector.
Hong Kong, Sydney, Seoul, and Taipai fell over 2% while Shanghai, Jakarta, Wellington, Singapore, and Manila also recorded losses.
Meanwhile, oil prices retreated after rallying a day earlier as analysts believe the rising Middle East tensions will unlikely affect the crude market.