GLOBAL MARKETS IN TIZZY

US President Donald Trump often creates more panic by his outrageous utterances than by his policy statements. The latest in the series of outlandish statements was his Wednesday’s attack on the Federal Reserve, the central bank of the country, which he said had ‘‘gone crazy’’.

Trump’s comment was followed by a massacre in Asian markets, including India. While BSE Sensex lost over 1,000 points at one point, China's most significant mainland index, the Shanghai Composite, dropped more than 5%, the second time in just four days it has lost 4% or more of its value. Elsewhere in Asia, Hong Kong's Hang Seng lost 3.3%, while Japan's benchmark Nikkei 225 was down just shy of 4%.

Apparently, Trump’s comment threw investors in a tizzy about the safety of their investment in markets.

Concerns that the US Federal Reserve would continue to tighten interest rates also sparked fears in Indian bourses about capital outflows. Investor wealth eroded by Rs 2.69 lakh crore on Thursday, hit hard by the massive sell-off in the equity market.

Of course, the real reason for dampening of investors’ confidence lies elsewhere, in the trade war between the US and China, which is again blamed mostly on the insular policy of Donald Trump. This also impacted the Sensex and Nifty, both of which registered big losses.

The Italian budget, meanwhile, has brought back fears of Eurozone crisis. Italy has proposed a budget spending beyond the deficit limit set by the European Union - 2.4 per cent of the GDP. This led to tension among European Union members, which was reflected in the European bourses. French markets and Germany markets lost over 2 per cent of its value while in the UK, the loss was 1.3 per cent.