The Hindu : Front Page : Stock market mayhem continues for second day

Online edition of India's National Newspaper
Wednesday, Jan 23, 2008
ePaper | Mobile/PDA Version

Front Page

Front Page

Stock market mayhem continues for second day

Oommen A. Ninan

Echo of turmoil in U.S. markets; remarkable recovery at closing hours and losses limited to 875 points

Photo: AFP

Shock after shock: Worry writ large on his face, a stock trader monitors the market at a brokerage firm in Mumbai on Tuesday. —

MUMBAI: The turmoil in the U.S. financial markets continued to torment domestic stocks and the other emerging and Asian stock markets for the second consecutive day on Tuesday. However, Indian stock indices made a remarkable recovery almost at the end of the trading hours — the benchmark 30-Share BSE Sensex recovered nearly 1600 points from its earlier losses in the day — as it limited its losses to 875.41 points or 4.97 per cent from its previous trading day’s loss of 1408.35 points or 7.41 per cent. The Sensex ended at 16,729.94.

However, market participants are expecting a rebound in stock prices on Wednesday as the U.S. Federal Reserve cut the rates sharply by 75 basis points to salvage the American economy on Tuesday.

Trading on the BSE and NSE was halted for an hour on account of volatility — there was a crash of more than 2000 points — almost immediately after the start of the day.

Though the markets ignored all talk of strong economic fundamentals from the Finance Minister in the morning after the re-start of trading, some positive cues from the European markets fuelled a recovery at the end. Foreign Institutional Investors (FIIs), the major players in the market, withdrew their funds and the markets crashed.

The Reserve Bank of India (RBI) had been regularly warning that India was not immune to global financial shocks.

The RBI felt that the outlook for the global situation was far more uncertain than before. In its monetary policy review scheduled for January 29, the RBI is expected to take a view on the possible recession in the United States.

Printer friendly page
Send this article to Friends by E-Mail

Front Page