Joining a global equity rout on worries about a sharp global recession, domestic indices fell to their lowest levels in nearly three years on “Black Friday” as the benchmark BSE 30-Share Sensex tumbled by 1070.63 points to close at 8701.07.
The index had last tumbled below 9000 in November 2005.
The sell-off began in the morning session itself — led by realty, oil and gas, bank and metal stocks — as the half yearly review of the Reserve Bank of India disappointed the markets, which were expecting some more measures from the central bank to expand liquidity in the system.
Signalling what could be a dark Diwali on Dalal Street, as many as 350 securities hit their all-time lows.
These included big names like Reliance Power, Cipla, Ranbaxy, Ambuja Cement, Hindalco, Jet Airways, Suzlon Energy, Idea Cellular and realty majors DLF Ltd. and Unitech.
The RBI had announced a slew of measures to assuage markets in the last one month, including the repo rate cut by 100 basis points four days back and a cut in the Cash Reserve Ratio — a portion of the deposits that banks have to keep as a reserve — to 6.5 per cent from October 11.
However, the sell-off intensified with the domestic as well as the foreign funds hammering Indian stocks in line with its Asian peers whose stocks tumbled on fears of a severe global downturn.
In the bloodbath, 20 stocks from the 30-Share Sensex fell more than 10 per cent. This was the steepest fall in any single trading session after a 1,408-point plunge on January 21 this year. A broader index, the NSE 50-Share Nifty, lost 359.15 points to close at 2584. The Sensex fell 1204.88 points at the day’s low of 8566.82 in late trade, its lowest level since November 23, 2005. Nifty hit a low of 2525.05 in late trade, its lowest level since November 11, 2005.
Meanwhile, announcing its stance of monetary policy for the remaining period of 2008-09, the RBI kept all the key rates unchanged even as it lowered its 2008-09 growth forecast to 7.5 per cent to 8 per cent from a previous forecast of around 8 per cent.
“The global downturn may be deeper, and the recovery longer than expected earlier,” said RBI Governor D. Subbarao, here. The central task for the conduct of monetary policy has become more complex than before, with increasing priority being given to financial stability. The current challenge, according to Dr. Subbarao, is to strike an optimal balance between preserving financial stability, maintaining price stability, anchoring inflation expectations and sustaining the growth momentum.
European shares — the U.K., French and German — lost between 8.1 and 9.79 per cent on data suggesting Britain would enter a prolonged recession.
Rupee breaches 50-mark
The rupee breached the historic 50-mark intra-day against the U.S. dollar on sustained demand for the greenback amid its sharp rise against major currencies. It, however, recovered after the announcement of the monetary policy review and closed the day a little lower at 49.95/96.
The index had last tumbled below 9000 in November 2005.
The sell-off began in the morning session itself — led by realty, oil and gas, bank and metal stocks — as the half yearly review of the Reserve Bank of India disappointed the markets, which were expecting some more measures from the central bank to expand liquidity in the system.
Signalling what could be a dark Diwali on Dalal Street, as many as 350 securities hit their all-time lows.
These included big names like Reliance Power, Cipla, Ranbaxy, Ambuja Cement, Hindalco, Jet Airways, Suzlon Energy, Idea Cellular and realty majors DLF Ltd. and Unitech.
The RBI had announced a slew of measures to assuage markets in the last one month, including the repo rate cut by 100 basis points four days back and a cut in the Cash Reserve Ratio — a portion of the deposits that banks have to keep as a reserve — to 6.5 per cent from October 11.
However, the sell-off intensified with the domestic as well as the foreign funds hammering Indian stocks in line with its Asian peers whose stocks tumbled on fears of a severe global downturn.
In the bloodbath, 20 stocks from the 30-Share Sensex fell more than 10 per cent. This was the steepest fall in any single trading session after a 1,408-point plunge on January 21 this year. A broader index, the NSE 50-Share Nifty, lost 359.15 points to close at 2584. The Sensex fell 1204.88 points at the day’s low of 8566.82 in late trade, its lowest level since November 23, 2005. Nifty hit a low of 2525.05 in late trade, its lowest level since November 11, 2005.
Meanwhile, announcing its stance of monetary policy for the remaining period of 2008-09, the RBI kept all the key rates unchanged even as it lowered its 2008-09 growth forecast to 7.5 per cent to 8 per cent from a previous forecast of around 8 per cent.
“The global downturn may be deeper, and the recovery longer than expected earlier,” said RBI Governor D. Subbarao, here. The central task for the conduct of monetary policy has become more complex than before, with increasing priority being given to financial stability. The current challenge, according to Dr. Subbarao, is to strike an optimal balance between preserving financial stability, maintaining price stability, anchoring inflation expectations and sustaining the growth momentum.
European shares — the U.K., French and German — lost between 8.1 and 9.79 per cent on data suggesting Britain would enter a prolonged recession.
Rupee breaches 50-mark
The rupee breached the historic 50-mark intra-day against the U.S. dollar on sustained demand for the greenback amid its sharp rise against major currencies. It, however, recovered after the announcement of the monetary policy review and closed the day a little lower at 49.95/96.
http://www.hindu.com/2008/10/25/stories/2008102558300100.htm
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