Markets suffer further heavy falls

HEAVY declines were again the main feature of international markets yesterday, with European exchanges falling to their lowest levels in almost two years.

Rising expectations that the US may not regain its triple-A credit rating any time soon and could suffer further downgrades in the coming months continued to spook investors.

While yesterday was chiefly about how the markets would react to Standard & Poor’s (S&P) downgrading the US credit rating on Friday, S&P’s own follow-up move — to downgrade the credit rating of American mortgage giants, Fannie Mae and Freddie Mac, due to their heavy reliance on the US Government — further added to market turmoil.