Sensex tanks over 1000 points as Fitch cuts US rating
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All the sectoral indices are trading with a fall. The biggest decline has come in banking and metal stocks. Shares of Tata Steel, Tata Motors, Hero Moto, Eicher Motors and Coal India fell more than two per cent. Shares of Reliance and HDFC Bank also declined by about 1.5 per cent each. 27 out of 30 Sensex stocks are on the decline. South Korea’s Cospi, Japan’s Nikkei, China’s Shanghai Composite and Hong Kong’s Hangseng were among the losers in other Asian markets. On Tuesday, the US markets closed with a negative trend.
Global oil benchmark Brent crude was up 0.85 per cent at $85.63 per barrel. According to stock market data, foreign institutional investors (FIIs) sold shares worth a net Rs 92.85 crore on Tuesday.
why the decline
The US stock market was also declining on Tuesday. Nasdaq declined by 0.43 percent and Dow Jones by 0.33 percent. Asian markets declined on the news of US rating downgrade. Japan’s Nikkei and China’s Hang Seng were down two per cent. The Nifty remained on a positive note for the fifth consecutive month in July. The market has gained more than 13 per cent in the last five months. Hence some investors engaged in profit booking. Due to this also the market declined.
America, the world’s largest economy country, has suffered a major setback. Fitch has downgraded America’s rating from AAA to AA+. America’s rating has been cut for the first time since 2011. In view of the country’s financial condition and rising debt, Fitch has cut America’s rating. Fitch had given top rating to America but now it has been reduced. Fitch says that the state of governance in the US has worsened in the last 20 years. Fitch is one of the world’s three major independent agencies that assess the credit worthiness of a country or company. AAA stands for Perfect Rating. But now America’s rating has been downgraded.
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