U.S. Treasury chief Timothy Geithner unveiled a new rescue plan that would put $2 trillion to work mopping up bad assets and restoring credit, but stock markets plunged on fears it would not work.The S&P 500 Index dropped 4.9 percent, the most since Jan. 20, to 827.16. The Dow Jones industrial average ended at 7888 down 4.6 percent -- its biggest one-day percentage drop since Dec. 17.
The lack of details frustrated many market participants."There’s still a lack of clarity,” Dan McMahon, director of equity trading at Raymond James Financial Inc. in St. Petersburg, Florida, said of Geithner’s proposal. “These are smart people and they’re supposed to have it figured out. We’ve been waiting all week and then he said nothing.”
Asian markets have reacted negatively, but not as bad as US markets. The Indian markets too, are expected to react in the same manner.Nifty has good supports around 2850/2800.