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The announcement of Tariff from President Donald Trump has created a panic in the whole world. Due to the global trade war, now the clouds of economic crisis have started looming all over the world. The stock markets ranging from America to China, Hong Kong to Taiwan and India are currently stirred up. Experts were warned that Black Mande could come back again. On the day of Mande, the Indian market got 19 lakh crore rupees within just 5 minutes. Whereas the entire global market also had the same condition. That is, it can be said that the possibility of experts to a great extent has proved to be true.
In such a situation, the question is arising as to what is the black mande, why about 11 thousand banks were closed at this time and how about 11 thousand banks were closed in one stroke, which Donald Trump’s tariff has once again reminded that tragedy.
What happened on the black day of Black Mande?
In fact, on 19 October 1987, that earthquake of the stock market was called Black Mande when the American stock market was the biggest destruction on Monday. Its effect was seen all over the world, which has not been forgotten even today.
The US Dow Jones Industrial Average declined by 22.6 per cent on 19 October 1987, which was the biggest decline in a day. Due to this, Dow Jones fell 508 points to close at 1738.74 after furore in the US market. After this major incident, there was record selling in global markets from Hong Kong to Lake Australia and Europe. There was a huge fear among investors and they sold their stocks. Due to this attitude of investors, there was a huge instability in the market.
Economic chaos
Actually, there were not many factor behind Black Mande, which came in 1987. At that time, the trend of computer based trading was increasing. With this, investors were adopting a policy of portfolio insurance. Automatic selling orders were placed when the market collapsed, which intensified the decline.
At that time in the 80s, the share price in the stock market started increasing. Because of this, investors felt that prices are more than the actual price. Investors were buying stocks on margin and when stock prices started falling, margin calls were made from Brokerage. Due to this, investors had to be sold under compulsion.
