Markets Trade Deep In Red On Negative Global Cues

The Global Markets emanate negative vibes this morning. U.S. stock futures declined, following the biggest weekly drop in the Standard & Poor’s 500 Index since 2008, amid concern that a downgrade of the nation’s credit rating by S&P may worsen an economic slowdown. European stocks posted their biggest weekly loss since November 2008, becoming the first major region to enter a market correction, as concern escalated that the U.S.’s economic recovery is stalling. This morning Asian stocks fell, leading the regional benchmark index’s five-day decline beyond 10 percent, after Standard & Poor’s cut the credit rating of the world’s largest economy, fueling concern a global economic recovery is stalling. In commodities, Oil plunged in New York after Standard & Poor’s lowered the U.S. credit rating from the highest level, stoking concern that an economic slowdown in the world’s biggest crude consumer will worsen and cut fuel demand. Gold surged to a record after Standard & Poor’s cut the U.S.’s top credit rating for the first time, fueling a slump in equities and the dollar amid increasing concern that the global economy is slowing. Copper in London dropped as much as 0.9 percent to $8,962 a metric ton, the lowest level since June 27, following Standard & Poor’s downgrade of the U.S. long term credit rating from AAA, spurring concern that the global economic recovery may falter. The markets have started from where they left on Friday, the Sensex opened with a downward gap of almost 400 points owing to selling pressure across Asia after S&P downgraded United States credit rating to AA+ from AAA, first time in 70 years, intensifying risk of double dip recession in the West. The Nifty plunged 151 points, to 5,059 and the BSE Benchmark Sensex declined 532 points, at 16,773. Markets were down for the fifth consecutive session, clocking the worst opening since October 2008. Among the sectoral indices, BSE IT index was battered further, it was down 4.7% in the Monday morning session on concerns that growth slowdown in the west may dent profits of IT companies if clients resort to spending cuts. TCS slumped 5.2%, Infosys and Wipro plunged over 4%. Metal shares continued to lose sheen for the second day in a row on anticipation of reduced demand in case of a global growth slowdown. The BSE Metal index declined 3.4%; Tata Steel was off 4.3%, Sesa Goa fell 4% and SAIL lost 3%. From the broader markets, the midcap and the smallcap indices were down 3% each. All the components on the Sensex were trading in the red. Top losers on the Sensex were Tata Motors, down 5.2%, DLF was off 3.5% and JP Associates lost 3.5%. Market breadth was negative, 1,695 stocks declined for 181 stocks which advanced on the BSE.