The stock markets almost hit their bottom, falling to nearly three-year low at the weekend as the recession worries continued to haunt investors across the world even as the salvage operation undertaken by various governments fell short of expectations.
In the week to October 25, the Bombay Stock Exchange 30-share bellwether Sensex plunged by 1,274 points or 12.8 per cent to settle the week at 8,701, the level not seen since November 23, 2005, when it had closed at 8,638.
The broader 50-share Nifty of the National Stock Exchange also tumbled by 490 points or 16 per cent to end the week at 2,584 from its last close.
The market saw a free fall as its global counterparts slipped on daily basis even as the Reserve Bank of India (RBI) said the present global financial markets crisis seems to be spreading across markets, institutions and countries, a day before announcing its mid-term review of monetary policy.
Contrary to expectations of further monetary measures, the apex bank kept all the key rates unchanged while lowering its growth projections to 7.5-8.0 per cent for this fiscal.
After infusing Rs one lakh crore in the banking system through a sharp 2.5 per cent CRR cut on October 11, the RBI slashed the short-term repo rate at which banks borrow from it to eight per cent on October 20.
The market regulator Sebi too took steps in the interest of capital market during the week. Sebi warned foreign funds against overseas lending and borrowing of Indian securities after the data showed that FIIs had lent equities worth Rs 348 crore to overseas entities for the purpose of short selling.
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The central bank also eased norms on overseas borrowing for Indian companies to boost inflows and help corporates raise funds for projects.
Analysts said the market situation seems grim with all the global markets under pressure due to an imminent economic recession and spreading financial markets crisis beyond the banking sector.
British Chancellor Alistair Darling said that UK was nearing recession after official data revealed a 0.5 per cent decline in GDP for the July-September quarter. The data comes after IMF suggested that US economy would be in recession between second half of 2008 and first half of 2009.
The Dow Jones Industrial Average was down 312 points or 3.6 per cent on Friday.
On the BSE, there was a single gainer in the Sensex pack with half of them showing one of the biggest losses at the weekend. The BSE Realty stocks were the worst hit during the week. As a result, the BSE Realty Index crumbled by 781.62 points or 31 per cent.
The Metal Index tumbled by 1,407.83 points or 24.27 per cent, the BSE Oil&Gas by 1,327.92 points or 20.5 per cent and the BSE Auto Index by 6618.64 points or 20 per cent.
The broad-based BSE-100 Index slumped by 721.90 points or 14 per cent to end the week at 4,458.94 from its last weekend's close.
On the NSE, the S&P CNX Defty nosedived by 388.10 points or 17.82 per cent to close the week at 1,790.35 from its last close of 2,178.45 and the CNX Nifty Junior also dipped to settle the week at 4,104.45, a net fall of 566.00 points or 12.12 per cent from its previous weekend's close.