Markets opened with triple-digit losses Wednesday after data out of China showed the economy there slowing and the U.S. Federal Reserve downgraded it’s outlook for the U.S. economy on Tuesday. The Toronto Stock Exchange’s S&P/TSX composite index fell 129.89 points, or 1.10 per cent, to 11,708.40. On the New York Mercantile Exchange, oil fell $1.30 US to $78.95 US a barrel and gold rose $7 US to $1,205 US an ounce. The Canadian dollar was trading at 9.91 cents US, down 96 basis points. In the U.S. the Dow Jones industrial average fell 196.85 points, or 1.85 per cent, to 10,447.40, while the Nasdaq composite index was down 55.86 points, or 2.45 per cent, to 2,221.31. “Risk aversion is dominating markets after some weak Chinese data and (Tuesday’s) downgraded near-term outlook from the (U.S. Federal Reserve),” Benjamin Reitzes of BMO Capital Markets said in a note. China’s July economic data showed growth continued to slow into the third quarter, with industrial production, fixed investment and retail sales slowing. “China’s growth needs to be driven increasingly by domestic demand, and softening consumption data certainly don’t point in that direction,” Reitzes added. Also weighing on markets, the U.S. Federal Reserve downgraded it’s outlook for the U.S. economy Tuesday, and reiterated its commitment to keep benchmark interest rate close to zero for “an extended period,” as anticipated. Meanwhile, both Canada and the U.S. saw their trade deficits with the rest of the world widen unexpectedly in June. The U.S. trade balance widened to $49.9 billion US in June from a downwardly revised $42 US deficit in May. Market expectations pointed to a significantly smaller $42.1 US billion deficit, according to Martin Schwerdtfeger, economist at TD Economics. Canada’s trade deficit rose to $1.1 billion in June from $695 million in May, Statistics Canada reported Wednesday. Economists polled by Bloomberg had called for the trade deficit to narrow to $300 million. Markets were also lower overseas. The Bank of England downgraded its economic outlook and forecast inflation above three per cent through much 2011 in its Quarterly Inflation Report. London’s FTSE lost 83.70 points, or 1.56 per cent, to 5,292.71 at midday. In Frankfurt, Germany’s DAX fell 111.77 points, or 1.78 per cent, to 6,174.48, and the Paris CAC fell 68.03 points, or 1.82 per cent, to 3,662.55. The Nikkei in Japan closed down 258.20 points, or 2.7 per cent, to 9,292.85, while Hong Kong’s Hang Seng fell 179.06 points, or 0.83 per cent, to 21,294.54. On Tuesday, the S&P/TSX composite index closed down 25.27 points, or 0.21 per cent, to 11,838.29. The Dow was down 54.5 points, or 0.51 per cent to 10,644.25. The Nasdaq composite index was off 28.52 points, or 1.24 per cent, to 2,277.17.

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