Markets tumble on US credit downgrading

  Fitch Factor

♦ Fitch downgrading dampened mkt sentiment

♦ Rising US bond yields

♦ Weak factory activity data from Eurozone and China

♦ FIIs offloaded equities worth Rs92.85 cr

Mumbai: Equity benchmark indices Sensex and Nifty fell by one per cent on Wednesday on weak global market trends and continuous foreign fund outflows. Fitch Ratings has downgraded the United States government’s credit rating, citing rising debt at the federal, state, and local levels and a ‘steady deterioration in standards of governance’ over the past two decades. The rating was cut on Tuesday one notch to AA+ from AAA, the highest possible rating.

The 30-share BSE Sensex tumbled 676.53 points or 1.02 per cent to settle at 65,782.78. During the day, it cracked 1,027.63 points or 1.54 per cent to 65,431.68. The NSE Nifty fell by 207 points or 1.05 per cent to end at 19,526.55.

“The Indian market witnessed a broad sectoral slide, affected by weak global market trends. Negative news regarding the US rating downgrade on fiscal concerns, coupled with weak factory activity data from Eurozone and China, led to widespread worries across the globe. Additionally, prolonged FII selling, triggered by a rise in US bond yields, has disrupted the mood of the domestic market,” said Vinod Nair, head (research) at Geojit Financial Services. “Markets traded under pressure and lost over a per cent amid feeble global cues. After the initial downtick, the Nifty inched gradually lower as the day progressed and slipped below the crucial support of 19,500 as well. The broader indices also felt the heat and shed over a per cent each,” said Ajit Mishra, SV-P (technical research), Religare Broking Ltd.