Global mkts fall; will Indian bourses follow suit?

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26 Aug, 2025 12:21

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The US markets fell sharply with the Dow halting its record advance and Twitter's market debut drawing the spotlight, as investors reacted to an unexpected rate cut by the European Central Bank and a read on third-quarter US economic growth. After closing at record highs on Tuesday, the S&P 500 fell over 1 percent marking its worst session since August 27. The CBOE volatility index rose to within reach of 14.

The US economy expanded faster than forecast in the third quarter. Advance GDP rose by 2.8 percent year on year compared with a 2.5 percent growth in the second quarter. The number of jobless claims fell by 9,000 in the week ended November 2.

European equities closed flat despite initially rallying after the ECB cut its main interest rate to 0.25 percent from 0.50 percent. The FTSE fell for the third straight day with some traders attributing this to a rise in sterling that could hit UK exporters.

The ECB cut rates responding to signs of falling inflation rates and record unemployment across the Eurozone. It has also cut the interest rate on the marginal lending facility by 25 basis points to 0.75 percent. It will take with effect from November 13. The interest rate on the deposit facility though has been left unchanged at 0.00 percent.

In India, market continued with its correction as the Sensex fell 71.17 points to close at 20822.77, while the Nifty breached the 6,200 market to close at 6187.25, down by 27.90 points.  On the earnings front, Punjab National Bank and Crompton Greaves will announce their earnings today.

In Asia, Asian stocks follow US sell-off. Japan and Korea are trading at 1-month lows. The yen hit a near seven-week low against the greenback at 99.4 per dollar. Japan is weighed down by blue-chip exporter stocks such as Suzuki Motor and camera maker Nikon. They skidded over 3 percent each while sharp lost 2 percent.

In commodities, Brent slips closer to USD 103/bbl levels and Nymex futures rise in early Asian trade as faster than expected economic growth in the world's top oil consumer revived hopes of increased demand.

From precious metals space, gold inches towards the 1300 mark and is trading near three-week lows and heading for a second straight weekly loss, after strong US economic growth sparked fears the US Federal Reserve may scale back its bullion-friendly bond purchases this year.