US corporate credit risk benchmark index rises

Yet another casualty of Fed chairman Ben Bernanke's blunt appraisal of the state of the US economy on Wednesday was a US index of corporate credit risk which climbed for the first time this week.

The benchmark Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, rose 1.5 basis point to 111.6 basis points late in the evening on Wednesday in New York.

Market analysts point out that this benchmark index typically rises with deterioration in investor confidence.

In his testimony to the Senate Banking Committee on Capitol Hill the fed chairman said central bankers ''remain prepared'' to act, as needed, to aid growth. But a lack of clear indication when the Fed would make its move spooked investors in America as well as across the globe.

The Standard & Poor's 500 Index lost 1.3 per cent and US Treasury 10-year note yields traded at the lowest since April 2009.

There was expectation on the market that the Fed may choose to increase monetary stimulus in a bid to keep the economy growing. Bernanke was not prepared to make any such commitments, however.

The Fed chairman, after outlining the tools available to effect a rescue operation that were at his command, merely stated that a review of the state of the economy was yet to be completed by his office.