Fitch downgrades US' rating: How soon can the markets recover?

Stock markets, analysts suggest, are impacted by unexpected events and see a knee-jerk reaction. When market valuations are high, the sell-off, they say, will be sharp

Global equity markets continued to feel the heat of Fitch Ratings’ downgrade of long-term foreign currency issuer default rating for the US to AA+ from AAA for the second consecutive day.

Most Asian markets, such as in Hong Kong, Shanghai and Japan lost up to 1 per cent in trade on Thursday. Back home, the S&P BSE Sensex and the Nifty50 also traded weak with a cut of around 0.3 per cent in intra-day deals.

Morgan Stanley’s upgrade of India to ‘overweight’, however, helped stem the fall.

“We upgrade India to overweight for secular leadership. We see a secular trend