Us Stock Market Crash

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Us Stock Market Crash

Us Stock Market Crash Will Affect The Uk Market?

lot of analysts are now talking about a potential crash in the US stock market. But will this crash also affect the UK stock market? To understand this, we must take a look at history and see how the UK market reacts to a shock in the global markets.

look at history shows that the global markets usually move together. So, if the US market crashes, it also shows up in all the other financial markets.

Global Markets Are Interconnected

classic example is the financial crisis of 2008 in the US market. Soon after that, the UK market also crashed, followed by all the major indices around the world.

But not all the markets are driven by the same things. For starters, the Japanese market is mostly dependent on the export of vehicles. Meanwhile, the US market is greatly influenced by the AI stocks.

The UK market, in particular, depends on the defensive sectors and the financial services. But, this also means the FTSE 100 has less exposure to the risky sectors, such as AI.

So, if the US market crashes this time, it will be due to the crash of the AI stocks. However, its impact will not be as big in the UK market, as it is not that exposed to AI.

However, a crash in the US market will definitely shift the market sentiment. And once the sentiment turns bearish, some effects will also show in the UK market.

According to Goldman Sachs and Morgan Stanley, a 10% to 15% decline is likely in the US stock market. When this happens, we can also expect a downside in the UK market.

The bottom line is that the UK market will also feel the heat, but the impact will not be as severe. This also leads us to the question of how an investor can prepare for the inevitable market crash.

According to experts, the best strategy is to invest in defensive stocks in the UK market. This will soften the blow to a certain degree, even if the US market crashes.

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