Toronto, Aug 9 (IANS): The continuing market mayhem Monday puzzled economists who wondered why investors are seeking refuge in the very US assets that have been downgraded by Standard and Poor's.

"It's a very perverse behaviour to run to the asset that had the downgrade. What it tells you is that this is fear. There is no other way of describing it,'' Craig Alexander, chief economist at Canada's top TD Bank Financial Group, said of the continuing market slide Monday.

Economists wondered why investors are rushing to the investments like US Treasury bills that have been downgraded by the ratings agency.

What markets are witnessing is "close to capitulation. Any day when you have the S&P down nearly 500 points and the Dow off over 500 points, I would consider it an emotional panic on the part of investors," Paul Taylor, chief investment officer at BMO (Bank of Montreal) Harris Investment Management Inc., was quoted as saying.

The Toronto stock market followed the over six percent plunge on the Naqdas to dive more than four percent Monday. The steep fall of 491.21 points was the biggest intra-day slide on the market in three years.

Just as Apple was hammered on Wall Street sinking 5.46 percent, its Canadian tech counterpart BlackBerry plunged almost five percent to close at $21.81 - the new low for Research In Motion (RIM). Apple stock closed at $353 .21 - down $20.41.

On a day when US president Barack Obama tried to calm investors, Canadian prime minister Stephen Harper said the downgrade and market plunge don't "change our overall assessment'' of the most robust of G8 economies.

"Notwithstanding the fragility of the economy and the headwinds that are there, we believe that a gradual recovery can continue. Our policies have been achieving that in Canada ... But obviously we have to do more,'' said the Canadian prime minister.