Why is the World Market Falling?

Key Points:

Nikkei 225 Plunge: Japan’s Nikkei 225 index dropped 12.4%, closing at 31,458.42 points.
Broader Market Impact: TOPIX index fell 12.8%. Global indices like the S&P 500 and Dow Jones Industrial Average futures also fell.
US Job Market Concerns: A report showed much slower hiring by U.S. employers, raising fears of a recession.
Historical Decline: Nikkei’s worst two-day decline, with a significant drop on Friday as well.
BOJ Rate Hike: Bank of Japan’s rate hike influenced market declines, especially with a weaker yen.
Technology Sector Hit: Heavy selling in technology stocks, affecting indices like South Korea’s Kospi and Taiwan’s Taiex.

Detailed Analysis:

1. Japan’s Market Crisis:

Nikkei 225 Index: Plummeted by 12.4% to 31,458.42 points.
TOPIX Index: Dropped 12.8% in the afternoon session.
Historical Context: This plunge is one of the worst since the 1987 “Black Monday”.

2. Global Market Reaction:

US Market Futures: S&P 500 and Dow Jones Industrial Average futures fell by 2.4% and 2.6% respectively.
Job Market Report: Slower than expected hiring in the US, sparking fears of an economic slowdown.

3. Impact of Bank of Japan’s Decision:

Rate Increase: The Bank of Japan raised its benchmark interest rate.
Yen Weakness: Persistent weakness in the yen has contributed to higher inflation, crossing the 2% target.
Current Yen Value: The dollar traded at 142.59 yen, significantly lower from previous weeks.

4. Technology Sector Slump:

AI Stock Euphoria Ends: Earlier gains in tech stocks, driven by AI advancements, reversed sharply.
Global Tech Impact:
- South Korea’s Kospi: Fell over 9%, with Samsung Electronics dropping 11.6%.
- Taiwan’s Taiex: Declined by 8.4%, with TSMC falling 9.8%.

5. Broader Economic Concerns:

Recession Fears: High interest rates and weak job data raise recession risks.
Investor Sentiment: Increased market volatility and anxiety reflected in the VIX index and Bitcoin’s fall.
Commodity Prices: Oil prices dropped, with Brent crude and US benchmark crude falling.

Summary :

The world markets are experiencing a significant downturn due to a combination of Japan's economic challenges, weak US job data, and global tech stock sell-offs. Investors are cautious, fearing prolonged economic instability and potential recession.

For more information, visit Reuters Market News and Bloomberg Markets.