Indian shares might experience significant sell-offs this Monday following the Nasdaq Composite’s descent into technical correction territory last Friday. This downturn is sparked by concerns that the U.S. Federal Reserve’s prolonged high-interest rate strategy could lead to a recession in the U.S. economy.On a more optimistic note, media outlets report that the Indian Finance Ministry is considering adjustments to the new long-term capital gains (LTCG) provisions introduced in this year’s Budget. These provisions aim to eliminate indexation benefits for unlisted assets, including property and gold, potentially offering some relief to homeowners.Several factors, including the release of the HSBC PMI for the services sector, the upcoming RBI interest rate decision, foreign institutional investor (FII) trading activity, and the final batch of Q1 earnings announcements, are expected to influence trading sentiment throughout the week.Asian markets opened significantly lower this morning, with Japan’s Nikkei and South Korea’s Kospi indices each dropping over 5 percent. The Japanese yen surged past the 145 per dollar mark for the first time since January, and bonds rallied, with two-year Treasury yields dipping by 11 basis points amidst expectations of deeper interest-rate cuts by the Federal Reserve.Meanwhile, gold prices edged lower due to profit-taking activities, and oil prices hovered near eight-month lows despite escalating tensions in the Middle East.U.S. stocks plummeted on Friday. A disappointing July jobs report and underwhelming earnings from companies like Intel and Amazon intensified fears of a potential recession driven by the Federal Reserve’s high-interest rate policy. The 10-year Treasury yield fell to its lowest level since December, with nonfarm payroll data indicating a growth of just 114,000 jobs last month, down from a revised 179,000 in June and falling short of the 185,000 forecast by economists. The unemployment rate rose to 4.3 percent, its highest since October 2021.The Nasdaq Composite, heavily weighted in technology stocks, dropped 2.4 percent to its lowest closing level in two months. The S&P 500 fell 1.8 percent, nearing a two-month low, and the Dow Jones Industrial Average declined 1.5 percent, ending a four-week winning streak.European stocks also fell on Friday, extending losses from the prior session due to concerns over weakening U.S. economic growth, which intensified the downturn in tech shares. The pan-European STOXX 600 dropped 2.7 percent, reaching its lowest point in over three months. Germany’s DAX fell 2.3 percent, France’s CAC 40 declined 1.6 percent, and the U.K.’s FTSE 100 decreased by 1.3 percent.The material has been provided by InstaForex Company – www.instaforex.com
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