Why is the stock market falling? What is the reason for the stock market falling?
The sharp declines experienced in European, Asian and American stock markets have also hit Turkey. Analysts are examining the question of “why is the stock market falling?” and are focusing on three main reasons. Here are the reasons for the stock market falling…
WHY IS THE STOCK MARKET FALLING?
Developments that suppressed global risk appetite, such as concerns that the US could enter a recession, increasing tension and geopolitical risk in the Middle East, and concerns about interest rates and inflation in the country triggered the decline in the stock market.
Concerns that economic activity in the US may slow down more sharply than expected and the flow of news that the Bank of Japan (BOJ) may raise interest rates further, coupled with increasing geopolitical tension in the Middle East and lower-than-expected nonfarm payroll growth in the US, have led to sharp declines in many countries' stock markets.
WHAT DO EXPERTS SAY?
İş Yatırım International Markets Director Şant Manukyan evaluated the developments in the stock markets yesterday for Sozcu.com.tr.
Noting that the first decline started in Japan yesterday and news that the BOJ could raise interest rates further caused a sharp decline in the indices, Manukyan stated that foreign investors' portfolio adjustments started in the Asian session.
Manukyan stated that recession concerns were added to this, non-farm employment data also increased recession fears, and that markets saw this as a search for a theme, and that when news that Iran could retaliate against Israel was added in the next 72 hours, investors' desire to enter the weekend with a position in the stock market decreased, and these developments were effective in the decline.
Manukyan said that there were strong sales but the real prices could become clear at the beginning of this week.
Info Investment Strategist Çağlar Toros said, “The impact of geopolitical tensions also hit BIST 100.”
Stating that the pressure on the index, which started with balance sheet expectations, continued with geopolitical tensions, Toros said, “The perception that weekend risks were not taken also increased panic sales in the market.”
Stating that the rise in the fear index abroad also affected the sales in Borsa Istanbul, Toros said, “There is a meeting on inflation data and inflation report in the country next week. If tensions ease and inflation developments turn positive, there may be reactionary purchases.”
EVALUATIONS FROM FED OFFICIALS
Following the employment data, the first assessments came from Fed officials. Chicago Fed President Austan Goolsbee emphasized that the Fed would not overreact to a single piece of data and stated that there would be a lot of data to come before the bank's next meeting. Goolsbee stated that the unemployment rate rising above 4.1 percent was a situation that the Fed needed to respond to.
Richmond Fed President Thomas Barkin also noted that one more employment report would be released before he had to make a decision on how to respond with monetary policy.
On the corporate side, while investors are also focused on the financial results of companies, the revenues of US technology giants Apple and Amazon, which announced their balance sheets after the markets closed yesterday, increased in the April-June period, while Intel's revenue decreased.
Intel shares fell 26.1 percent after the company announced a loss of revenue and layoffs, while Amazon shares fell 8.8 percent after revenue missed expectations.
Apple shares rose 0.7 percent after revenue beat estimates and iPhone sales fell slightly but topped expectations.