Market to open gap-down as financial crisis worsens

Stocks are headed for a downhill journey on Wednesday as the global financial crisis worsened after US Federal Reserve chief Ben Bernanke's r
emarks indicated the central bank's record loans to unblock credit markets are insufficient to prevent a deeper economic downturn.

US stocks plunged on Tuesday in their fifth straight declining session. The Dow Jones Industrial Average sank 508.39 points, or 5.11 per cent, to end at 9,447.11, the Nasdaq Composite Index dropped 108.08 points, or 5.8 per cent, to close at 1,754.88 and the Standard & Poor's 500 Index slid 60.66 points, or 5.74 per cent, to 996.23 - the first time the benchmark index has closed below the 1,000 level in more than five years.

Federal Reserve Chairman Ben Bernanke did little to reassure markets when he cautioned that downside risks to economic growth have worsened. He signaled policy makers are ready to lower interest rates as the credit freeze poses an escalating danger to the economy. The world financial system is under 'extraordinary stress' and history shows that severe instability can take a heavy toll on the broader economy if left unchecked, Bernanke said.

Extending the global rout, Asian markets declined sending Hong Kong's Hang Seng below 16,000 for the first time in two years. The Nikkei slumped 4 per cent, Straits Times plunged 3.23 per cent, CSI 300 fell 2.08 per cent and Kospi lost 2.86 per cent.

Source: EconomicTimes