Market seen extending two-day losses as recession worsens

Key benchmark indices are seen opening sharply lower, extending two-day losses, in a global backlash following renewed global economic worries. The SGX Nifty futures for February 2009 series dropped 33 points in Singapore.

Deepening economic gloom and fears about the health of the global finance sector pushed Asian shares to their lowest level this month and Japan's Topix index toward the lowest close in 25 years. China's Shanghai Composite was down 1.95% or 45.17 points at 2,274.26, Hong Kong's Hang Seng fell 0.82% or 105.67 points at 12,839.73, Japan's Nikkei declined 1.19% or 90.86 points at 7,554.65, Singapore's Straits Times was down 0.11% or 1.78 points at 1,636.14, South Korea's Seoul Composite plunged 1.07% or 12.02 points at 1,115.17 and Taiwan's Taiwan Weighted shed 0.37% or 16.55 points at 4,475.23.

US markets tumbled on Tuesday, 17 February 2009 with the S&P 500 and the Dow industrials closing at near three-month lows, as regional manufacturing data signaled the recession is worsening while fresh worries about European banks underscored the global nature of the downturn.

The Dow Jones Industrial Average slumped 297.81 points, or 3.79% to 7,552.60. The Nasdaq Composite index fell 63.70 points, or 4.15%, to close at 1,470.66 and the S&P 500 fell 37.67 points, or 4.6%, to 789.17.

US President Barack Obama signed a $787 billion economic stimulus bill into law on Tuesday, 17 February 2009 predicting the package of spending and tax cuts. Obama said the stimulus package - one of the most costly pieces of legislation in US history - cleared the way for Americans to begin 'laying claim to a destiny of our own making.'.

Today evening Obama will outline another big piece of his recovery effort - a $50 billion plan to help stem foreclosures in Arizona, one of the states hardest hit by the mortgage defaults that are at the center of the nation's economic woes.

Meanwhile the US auto industry needs even more help from the government to survive than originally thought. General Motors on Tuesday said it could need up to $30 billion from the Treasury Department to keep operating. Included in that amount is $13.4 billion the company has already received. Previously, GM had said it could need as much as $18 billion. General Motors Corp. and Chrysler LLC said Tuesday they will need billions more in government loans than they predicted just two months ago.

Stocks fell across Europe overnight on deepening financial crisis in eastern Europe as fears escalate that troubles in former communist countries could wallop western Europe's already-stressed banking system..

Back home, a broad-based sell-off spilled over to the second session in a row on Tuesday, 17 February 2009 after interim budget presented on Monday, 16 February 2009, turned out to be a non-event. Weakness in global markets also dampened sentiments. The BSE 30-share Sensex fell 270.45 points, or 2.91%, to 9,035, and the S&P CNX Nifty dropped 78 points, or 2.74%, to 2770.50. In the last two trading session, the barometer index has lost 6.2%.

According to provisional data on NSE, FIIs were net sellers worth Rs 462.21 crore while mutual funds bought shares worth Rs 278.42 crore on Tuesday, 17 February 2009.