US markets fall 3-3.5% amid renewed recession concerns

Excerpts from Power Breakfast on CNBC-TV18 Watch the full show »

By Varinder Bansal, Research Analyst at CNBC-TV18

Global markets turmoil: Blame on Europe and currencies

The US equity markets melted amid renewed recession concerns on Thursday. However, it managed to recover marginally from day's low;

European markets fell sharply on reports that European Union is seeking to recapitalize 16 banks.

US markets witnessed worst one-day percentage drop in a month; Dow Jones closed at a new 52-week low.

President Barack Obama yesterday urged "coordinated action" to prevent a return to recession.

The Dow Jones Industrial Average fell 391 points at 10,734, after seeing recovery of 137 points from day's low of 10,597.

NASDAQ Composite ended down 83 points at 2,456, after seeing recovery of 36 points from day's low of 2,420.

The S&P 500 Index closed down 37 points at 1,130, after seeing recovery of 16 points from day's low of 1,114.

NYSE share volume climbed to more than 1.7 billion shares.

US Declining Sectors: Materials fell 5.5%, Energy lost 5.3%, Industrials was down 3.8%, Tech tanked 3.2% and Financials plunged 3%

Material hit the hardest: Vedanta was down 13%, Rio Tinto down 10.7%, Xstarta down 9.5%, Arcelor Mittal down 8.8%, BHP Billiton down 8.3% and Alcoa down 6.7%.

MSCI Asia Pacific excluding Japan Index was down 9.3% this week - largest weekly loss since 2008, after global equities entered a bear market.

European shares closed down sharply at 26-month low: CAC was down 5.25%, DAX down 5% and FTSE down 4.7%.

Other European peripheral markets: Hungary Index was down 6%, Argentina MerVal crashed 5.7%, PSI General Index lost 5%, Spain lost 4.6% and Italy was down 4.5%.

CBOE VIX rose 11% at 41.35.

Asian markets opened sharply down; Kospi was down 4.5%, Taiwan down 3.6%, Hang Seng down 1.8% and Straits Times down 1.6%. SGX Nifty slipped 1%.

Economic Data

Chinese Manufacturing output slowed for the third successive month in September

Business activity in France and Germany grew at its weakest pace in more than two years in September

US new claims for jobless benefits fell 9,000 to 423,000 last week

Currencies

Dollar was down 46 basis points versus Euro at 1.3522, after rebounding from a 0.8% drop yesterday

Yen rose 5 basis points versus USD at 76.23

Yield on the benchmark 10-year Note dropped to a record low near 1.7%

Australian and New Zealand dollars strengthened after falling more than 2% yesterday

Korean won was down 1.1% versus USD.

Commodities

CRB Commodity Index fell more than 4% to a new 2011 low

Crude Oil was down 6.3% at USD 80.51/barrel, largest single-session percentage drop since early August

Gold fell 3.8% at USD 1739/ounce

Silver futures melted 9.8% at USD 36.58/ounce

Sugar was down 4.3% and Coffee down 5.5%.

Data to watch

IMF/World Bank annual meeting; Earnings from KBHome