A leading stock broker said ''A global sell-off triggered the biggest weekly fall for Indian indices since 1990. Fears that the deepening credit crisis will push the global economy into recession, rattled stock markets across the globe. World markets were continuously pounded on mounting fears that the escalating credit crisis will drag the global economy into recession.'' Back home, weak industrial output data added to the gloom on October 10. The Reserve Bank of India yesterday announced a 100 basis point cut in the cash reserve ratio (CRR), the proportion of deposits that banks must keep with the central bank, in addition to a 50 basis point reduction announced on October six, to boost liquidity.
The RBI's steep cut in cash reserve ratio, twice in the week, failed to soothe investors' nerves. Investors looked helpless and resorted to unloading of their holdings after the coordinated efforts by the central banks from major countries to shore up liquidity failed to have desired impact on the market sentiment.
The BSE Mid-Cap index was down 21.42 per cent at 3,676. The BSE Small-Cap index was down 20.31 pc at 4,355.45. Both the indices underperformed the Sensex. The key benchmark indices extended steep losses of the previous trading session on October six, as stocks fell across the globe after the global financial crisis deepened. The BSE 30-share Sensex lost 724.62 points, or 5.78 pc, to 11,801.70. The S &P CNX Nifty was down 215.95 points, or 5.66 pc, to 3,602.35.
The key benchmark indices ended mixed on a highly volatile day of trade on October seven. The BSE 30-share Sensex lost 106.46 points or 0.9% to 11,695.24. The Nifty was up 4.25 points, or 0.12 pc, to 3,606.60. Institutional buying and short covering helped the market stage a strong rebound from lower level on October eight. The BSE 30-share Sensex lost 366.88 points, or 3.14 pc, to 11,328.36. The Nifty was down 73.25 points, or 2.03 pc, to 3,533.35. The market was closed on October nine on account of a national holiday.
ICICI Bank slumped 27.83 pc to Rs 364.10, lowest in almost four years. The company clarified to the media that it had adequate liquidity. A finance ministry official said Indian banks were well capitalised and the ministry did not see specific problem with ICICI Bank. Reliance Industries slipped 13.29 pc to Rs 1,527 in the week.
The promoters of Reliance Industries converted 12 crore warrants into an equal number of shares. Post-transaction, the promoter group holds 49 pc stake in the company, with 52 pc voting rights. This involves an infusion of around Rs 15,142 crore into the company. The shares have a lock-in period of three years. Bharat Heavy Electricals declined 14.09 per cent to Rs 1345.85. Bharat Heavy Electricals and Nuclear Power Corporation of India are reportedly in talks with foreign firms like Siemens, Alstom and GE for a third partner in their planned joint venture to set up nuclear power projects in India.
Oil and Natural Gas Corporation (ONGC) fell 10.18 pc to Rs 915.85. The company will shortly tie up with Uranium Corporation of India for exploring and mining the fissile material, suggest reports. Tata Motors fell 11.87 pc to Rs 291.45. The company, on October seven, signed an agreement with Gujarat government to make the Nano car there days after the company pulled out of West Bengal.
Infosys Technologies fell 11.81 pc to Rs 1,226.70. The company revised its dollar revenue guidance for the year ending March 2009 downwards, to reflect the current economic situation and the drastic depreciation of major global currencies against the US dollar.
However, Ranbaxy Laboaratories spurted 10.82 pc to Rs 292.40. The US Department of Justice withdrew a motion against the drugmaker for allegedly bringing adulterated and misbranded medications into the United States.