Stocks tumble on global recessionary woes; Sensex, Nifty down 3%

2 Dec 2008, ECONOMICTIMES.COM
MUMBAI: Stocks opened sharply lower on Tuesday after the world’s largest economy was officially declared to be in recession. All sectoral indices were in the negative territory, with metals and realty leading declines. National Stock Exchange’s benchmark Nifty tumbled 84.45 points or 3.15 per cent to 2598.45. Bombay Stock Exchange’s 30-share Sensex skid 304.04 points or 3.44 per cent to 8535.83 from Monday’s close. US stocks tumbled on Monday as news pointing to the deepening economic slump around the world erased the bulk of last week's sharp gains, with financial services companies and retailers among Wall Street's biggest casualties. The Dow Jones Industrial Average skid 679.95 points, or 7.70 per cent, to end at 8,149.09, Standard & Poor's 500 Index lost 80.03 points, or 8.93 per cent, to finish at 816.21 and the Nasdaq Composite Index plummeted 137.50 points, or 8.95 per cent, to close at 1,398.07. The US entered a recession in December 2007, according to the National Bureau of Economic Research. Its business cycle dating committee, which is considered the arbiter of whether the US is in recession, met on Friday to make the decision. The NBER says that the US economic expansion lasted 73 months, from November 2001, before contracting. It used a broad range of economic indicators, such as employment and production, to make this judgement. In a statement, the committee said that the "decline in economic activity in 2008 met the standard for a recession". Stocks across Asia fell sharply tracking Wall Street cues as a deepening global recession drove down oil and metal prices and heightened concerns company earnings will collapse. The Nikkei fell 3.5 per cent, the broader Topix shed 3.71 per cent, Hang Seng dipped 4.33 per cent and Straits Times declined 1.72 per cent.