The Hindu : Front Page : Market mayhem continues

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Saturday, Oct 11, 2008
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Market mayhem continues

MUMBAI: After tanking over 1000 points within minutes of opening, the benchmark Sensex staged a moderate recovery but still closed lower by more than 800 points at 10527.80, the lowest in more than two years, on a sell-off spree which mirrored the panic among investors worldwide.

Even as the 30-share Sensex was recovering by mid-session on encouraging comments from Finance Minister P. Chidambaram and reports of inflation declining against expectations, an abysmal performance in industrial growth pulled down the barometer again. A moderate recovery in the key index was backed by the RBI decision to cut CRR by one percentage point in addition to 50 basis points earlier this week.

The BSE barometer finally settled the day at 10527.80, showing a loss of 800.51 points.

The key index had lost a whopping 1088 points, or nearly 10 per cent, at the outset.

Similarly, the wide-based National Stock Exchange index Nifty in volatile movements, closed lower by 233.70, or 6.65 per cent, at 3279.95, after touching the day’s low of 3198.

Marketmen said the steep fall in the beginning was triggered by weak global cues.

Weakening rupee

The selling pressure was further strengthened by a weakening rupee which plummeted to its all-time low of 49.30 against the dollar before recovering to 48.46.

Later, particularly weak IIP data negated whatever positive sentiment emerged on a decline in inflation.

Marketmen said the meltdown in global financial markets could have a direct impact on India and pointed out that the rupee fell to its lowest level, prompting investors to seek safer havens other than emerging markets. They noted that the rupee, equity and commodity market plunged while gold surged to an all-time high as investors brought the precious metal as a safe hedge.— PTI

Economic orthodoxy was built on superstition

Coping with the crisis

Rationale for imposing CRR

RBI cuts cash reserve ratio

CRR and the chart horror

Bankers anticipate another cut in CRR

— PTI

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