Stock Markets around the globe face crisis; is the market going into recession?

Thu, Oct 11, 2018 12:33 PM on Corporate, International, Latest, Stock Market,
Stock Mark...

A downward trend has hit prominent stock markets around the globe. Most of the established benchmark indices have lost massive points in recent days. It seems as if the global market are on the verge of entering the recession phase similar to that in 2008-09. As per the IMF, global annual real GDP growth rate equal to or less than 3% is equivalent to global recession. However, IMF had recently pegged the global annual real GDP growth rate at 3.7%. While the real GDP growth rate of advanced economies stands at 2.4%, that of developing and emerging economies stands at 4.7%.

Coming back to performance of global benchmark indices around the globe, a losing trend can be seen in most of the indices. All of the benchmark indices of the American stock market have taken a hit in recent days. NYSE Composite Index has fallen 2.61% or 338.32 points, NASDAQ has fallen 4.08% or 315.97 points, Dow Jones Industrial Average has fallen 3.15% or 831.83 points and S&P 500 has fallen 3.29% or 94.66 points. Similarly, other global indices have also lost like Nikkei 225 of Tokyo Stock Exchange fell by 4.23% or 948.88 points, SSE Composite Index of Shanghai Stock Exchange fell by 4.80% or 130.4 points, TAIEX of Taiwan Stock Exchange fell by 6.31% or 660.72 points, Straits Times Index of Singapore Stock Exchange fell by 2.8% or 87.41 points and FTSE 100 of London Stock Exchange fell by 1.27% or 91.85 points. Talking about the Indian stock market, SENSEX of Bombay Stock Exchange fell by 2.37% or 823.56 points and NIFTY 50 of National Stock Exchange fell by 2.48% or 259.35 points.

A fall of this intensity on a global scale cannot be a mere coincidence. This can be the impact of Trump’s trade war against China and his recent dig on the Federal Reserve. After Trump’s move towards protectionism, other countries seem to be following and the impact can be seen on the global stock market. However, the standing question right now is if the global market slowly and gradually going into recession? Should the people be ready to face similar situation like that of 2008-09?