It was supposed to happen and no one could stop it! European indices started off weak following the cues from US markets on Friday, August 5 2011 and Asian market fall on Monday, August 8 2011.
The FTSE 100 Index started off flat just 4 points down soon to fall deeper. In few minutes of trade, the index even recovered a bit to touch highs of 5295 points for the day.
But after the highs, it didn’t take much time for the index to wander in the red territory and since then, it still is showing a red ticker. FTSE marked its day’s low of 5141.88 points and is trading in a tight range of 20-30 odd points without much action.
In Germany, the DAX started low and just touched the green zone to list a day high of 6272.43 points. After that, there is just red color all around the index as a result of heavy selling. With a low of 6043.43 points, DAX gained back 40 odd points and is constantly trading in the similar range. Other European indices are trading 1-2 percent lower from their previous close on Friday and are simply following the global cues.
All thanks to the US debt ceiling bill passed in Congress which followed S&P downgrading the nation’s economy from AAA to AA+. Asia reacted on similar notes earlier with losses of 2-4 percent across all the indices. With whatever is going on currently in the global arena, European markets opening with lows is another concern.
The Dow futures have been constantly in the red too throughout the day and with just minutes to go for the US markets to open, a lot of action can be expected. Although range-bound currently, Europe seems to be waiting for US indices to open. It is almost sure that markets would end their day in red but how intense and deep the color goes is strictly dependant of Dow and Nasdaq.
