The Indian equity market continued to slide in September 2008 with the S&P CNX NIFTY, registering its second sharpest fall since January 2008, declining around 10 per cent.
A Crisil study has estimated that Rs 230,000 crore of shareholders’ wealth eroded in the background of the situation in the US financial markets.
On the contrary, the fall in the US markets was lower with the S&P 500 and Dow Jones both declining by around 9 per cent and 6 per cent respectively, while emerging markets lost around 18 per cent during the month. Pessimism in the financial markets following the filing for bankruptcy by Lehman Brothers, Merrill Lynch’s sell-off, the bail out of AIG and perceived uncertainty around the US bail-out package added to investor fears.
Commenting specifically on the Indian equity markets, Chetan Majithia, Head-Equities, CrisilL Research said, “The BSE Realty Index and the BSE Metal Index were the most severely affected dropping by 32 per cent and 25 per cent. Concerns over slowing demand in the real estate market due to a liquidity crunch.”