Recession

Recession

Stocks worldwide went into a tailspin today, slumping as much as three per cent, as mounting concerns about the financial health of the US and escalating European debt turmoil pushed investors into a selling spree.

On the first day of trading after the US lost its coveted 'AAA' credit rating, markets across Asia and Europe were awash with red.

Cheered by the European Central Bank's (ECB) move to buy government bonds, key indices in the region -- FTSE 100, Dax and Cac 40 -- opened in the green. But the momentum petered out towards afternoon trade, with most of the shares dropping over one per cent.

Most of the markets worldwide continued to slide after being hammered on Friday.

From Tokyo to London to Hong Kong, panicky investors sold shares even though there were some kind of buying at lower levels in markets such as India.

The Asian route was led by Chinese benchmark Shanghai SE Composite index, which plunged 3.79 per cent to close at 2,526.82 points. South Korea's key Kospi index and Singapore's FTSE Straits Times Index fell over three per cent to close at 1,869.45 points and 2,884 points, respectively.

Japan's key Nikkei index shed over two per cent to end the day at 9,097.56 points, while Hong Kong's Hang Seng index plummeted more than two per cent to 20,490.60 points.

Among the major Asian indices, India's 30-share Sensex saw one of the lowest losses. Recouping some of its early morning losses, the benchmark index closed at 16,990.20 points, down 1.82 per cent.

Global ratings agency S&P downgraded the sovereign ratings of the US to 'AA+' from 'AAA' on Friday, triggering widespread concerns about the health of the world's largest economy.

On the European front, the initial optimism about ECB plans to purchase bonds of debt-laden nations, gave away to panic. London Stock Exchange's FTSE 100 declined 1.75 per cent to 5,155.43 points while Germany's Dax index tumbled 2.34 per cent to 6,090.44 points.

France's benchmark Cac 40 fell 1.75 per cent to 3,221.32 points in afternoon trade.

Russian shares were also trading in the red, dropping over two per cent in afternoon trade.