So oil prices fell by nearly 30%.
How does it impact the stock markets .?
Infact it should be positive for the economy and the markets in so many ways
I am not able to understand why markets behaved in such a way today .
Recession
falling oil price may not be a concerned , but when both stock market and crude oil is falling then there something fundamentally changed in the world , it happens rarely but its a sign of major world depression .
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It isn’t bad for Indian markets but falling oil prices wasn’t the only trigger driving prices down, it was also increasing cases of Coronavirus globally.
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Reason is that oil powers most of the transportation networks worldwide and energy needs for many industries. Transportation activity and energy consumption has a direct correlation with the economic activity. Oil prices falling indicates economic activity is reducing which is the first step towards slowdown/recession
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U.S. Market Rebounds Sharply; Crude Oil Prices Rises
At 8:00am IST, the SGX Nifty Futures was trading 0.4% lower at 10,410, compared with its previous close.
On Monday, after floundering for most of the day, the markets recovered mildly in the last hour but still closed with heavy losses on higher volume. Nifty pierced August 2019 lows and made a fresh 52-week low. India’s 10-year government bond yield breached the 6% mark. Yesterday, after a positive news flow from the White House regarding a special package and tax cut, global markets rebounded sharply.
As Nifty continues to make new lows, we are yet to see day one of an attempted rally. We will wait for a blue or pink rally day to consider day one of an attempted rally. On the sectoral front, Nifty Metal (-7.7%) and Media (-6.6%) led the way down. Nifty Auto, Bank, Realty, FMCG, and Pharma booked losses of 3–5% each. Of 2,175 stocks traded, 273 advanced, 1,608 declined, and the remaining traded flat.
Global stock markets: Nasdaq, +5%; Dow 30, +4.9%; S&P 500, +5%; KOSPI, -1.7%; Nikkei, -1.4%; Hang Seng, +0.2%.
Key News
Tata Consultancy Svs board has approved the payment of an interim dividend of Rs 12 per share for FY20.
Shriram Tran.Fin. has been charged with a penalty of Rs 5 crore by an Enforcement Directorate order on an old case of issuing warrants.
Union Bank Of India announced a reduction in its MCLR by 10bps across all tenors, effective March 11.
O’Neil Market Condition Report
For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 0%; Rally Attempt, 0%; Uptrend Under Pressure, 4%; Downtrend, 96%.
Source : MarketSmith India