Financial markets slide amid fears of global recession – indiablooms

Written by Amanda

Financial markets slide amid fears of global recession  indiablooms

Stock market indexes across the world have gone through massive ups and downs since Russia declared war on Ukraine. But Friday, the stocks across the world suffered the biggest fall as the investors feared tighter monetary policy by the inflation-fighting central banks across the world could impair economic growth.

This was the sharpest weekly slide at their closing last Friday since the pandemic meltdown of March 2020.

Across all asset classes, risk assets suffered the biggest losses as central banks doubled down on tighter policy to tame runaway inflation.

Following this investors fear that recession is inevitable.

India’s 30-stock S&P BSE Sensex and the broader NSE Nifty suffered their worst week since May 2020.

The S&P 500 slid 5.8 percent, its biggest loss since the third week of 2020.

“Inflation, the war and lockdowns in China have derailed the global recovery,” economists at Bank of America said in a note to clients.

They anticipate a 40 percent possibility of a recession in the United States in 2023 as the Fed keeps increasing rakey policy rates.

“We look for GDP growth to slow to almost zero, inflation to settle at around 3 percent, and the Fed to hike rates above 4 percent.”

America’s central bank Federal Reserve Wednesday increased its target interest rate by three-quarters of a percentage point and signaled more hikes in the coming months to stem the biting inflation.

US stock indexes had slumped sharply Thursday, following Federal Reserve’s biggest interest rate hike since 1994 that heightened recession worries, media reports said.

After, the 75-basis-point hike by America’s central bank, Switzerland and Britain increased key policy rates.

Source: indiablooms.com

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