New Delhi: Japan's stock market has fallen drastically. It fell by about 5 percent in early trade on Monday (30 September). At the same time, China's stock market is witnessing a strong rise. The Shanghai Composite (SSE Composite Index) jumped by about 6 percent in early trade.

At the same time, the Indian stock market witnessed a decline in the pre-open session. In the pre-open session, the Sensex was at 85,208.76 with a decline of 363.09 points or 0.42 percent. At the same time, the Nifty was also at 26,061.30 with a decline of 117.65 points or 0.45 percent. This trend of decline continued even after the market opened.

Reason for tsunami in Japan market

The reason for the fall in Japan's stock market is political change. In fact, Japan's ruling Liberal Democrats have chosen former Defense Minister Shigeru Ishiba as the next Prime Minister. Ishiba will replace current Prime Minister Fumio Kishida on Tuesday, who has resigned due to a drop in his popularity rating.

Ishiba said after winning the party vote on Friday that he would continue to follow Kishida's vision to boost Japan's sluggish economic growth. However, experts of Japan's political situation say that the market and investors would have taken a more positive view if Ishiba's top rival and Economic Security Minister Sanae Takaichi won.

Why is China's stock market booming?

The Chinese government is constantly trying to boost the real estate sector. A relief package has also been announced for this. This has had a very positive effect on the stock market. Hang Seng and Shanghai have risen by 13 percent in just one week.

China is trying to reduce the borrowing cost of the real estate sector. It has eased the rules for many home buyers in many provinces. The Shanghai Composite was trading at Rs 3,263.59 with a gain of 5.70 percent at 9.10 am. Hong Kong's Hang Seng was also up by more than 3 percent.

Impact of Japan and China on India

Last time when the Japanese stock market fell due to the 'Yen carry trade', it had a very negative impact on the Indian market as well. However, there is not much chance of this happening this time, because the major reason for the fall in Japan is the political turmoil there. Japan's stock market may become normal again as soon as the political situation becomes normal.

On the other hand, if we talk about China, it can have both positive and negative effects on the Indian stock market. The revival of China's real estate market means that it will no longer dump products like steel in markets like India at very cheap rates, which will benefit Indian industry. On the other hand, foreign portfolio investors may withdraw money from the Indian market and go there in the possibility of good growth in China. This can be a loss for us in the near term.