Black Friday for financial markets after Brexit, India ready to face challenges says govt
As the news of Brexit came in world financial markets plummeted, fearing recession gripping the UK economy.
Global financial markets reacted sharply to the British decision to leave European Union. As the British media projected a win for the leave camp it shocked investors across the globe, triggering jitters across the financial markets. Asian markets including India's Sensex fell sharply as the news of Brexit started coming in.
Japan's Nikkei 225 was down by 7 % percent after bearish mood took over the traders. The investors rattled by the likely uncertainty of the global market were on selling spree in all the markets in Asia. South Korea Kospi was down to 4 percent.
India's Sensex suffered its biggest fall in 10 months after the Brexit became a reality The Sensex slipped below the 26,000 mark, and the Nifty traded over 300 points lower. All 51 stocks in Nifty index traded lower.
The companies which have substantial exposure in UK suffered the most. Tata motors crashed by 14 percent while Tata steel lost 8 percent.
Finance minister Arun Jaitely said India is prepared to face the short term and long term challenges of the uncertainty of the financial world.
Economic affairs secretary Shakthikanta Das has said that the government is ready to face all eventualities. He said the fall in Sensex is because of initial spontaneous reaction.
The FTSE 100 futures of the Britian traded 9% lower, which suggest severe fall in value for the British stocks.
The fear of financial recession gripping once the formality of divorce from EU happens could make investors in Britian more pessimistic.
Since the investors tried to exit from the risk driven stock market, the price of gold started soaring in international market. There has been 5 percent increase in the price of the gold in the world market. The oil futures on the contrary fell by 6 percent.
The financial world has always reacted sharply to the political developments in the world. After the terror attack on September 11, across the world the market plummeted. When the recession of 2008 was heralded on 15 September 2008, the markets nosedived internationally. To this list comes 24 June 2016 after the historic British decision to leave European Union