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Sensex nose dives again; Investors lose $150 Bn
By siliconindia
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Wednesday, 23 January 2008, 17:46 IST
Mumbai: Monday, the country's stock markets saw the benchmark index of the BSE shed 2,000 points intra-day before rallying marginally later in the afternoon and sensex closed 1,408 points down at 17,605 suffering a 7.40 percent loss. Still on the second day of the mind-boggling meltdown of stocks, which led to suspension of trading, market seems to be haunted by its severe impact.
On Tuesday, investors lost over $150 billion (Rs 6 lakh crore) within minutes of the opening of the Bombay Stock Exchange. Even after the market opened at 1100 hours, the bears continued playing and within an hour the BSE Sensex was reading down by over 2200 points leading to the suspension of trading for an hour.
A combination of weaker global economic outlook, liquidity sucked out by a couple of recently launched IPOs and forcible liquidation of securities pledged by investors have been considered to be the reason for the going down.
In an attempt to calm investors, Finance Minister P Chidambaram said that enough liquidity would be provided to market players. "I am assured by the Reserve Bank of India and all the banks that enough liquidity will be provided to brokers and market players. Liquidity will not be an issue," Chidambaram said.
However, Chidambaram exuded confidence that investors would return to market as fundamentals of the economy were strong. "Worries of western world should not be allowed to overwhelm us. Our economy is very different from some economies of developed countries. Our economy is a strong economy and so is the corporate sector," he stated.
"We will grow at nine percent this year. Even Rangarajan Committee (Prime Minister's Economic Advisory Council) has said that we will grow at 8.5 percent next year," the finance minister said. Banks have reported that investments in the economy are running very high as the demand for credit is strong, he said, adding, "I am sure investors will take informed and matured decisions and not give any room to unwarranted apprehensions and market rumors."
On Tuesday, the Indian stock market restricted losses to 875.41 points after previous days record lose of 1408 points. The 30-share Sensex of the Bombay Stock Exchange (BSE) fell by 2,029.05 points; down 11.53 percent minutes after trading began in the morning.
The National Stock Exchange (NSE) index Nifty ended Tuesday with a loss of 309.50 points at 4899.30. It had touched the day's low 4448.50 and a high of 5230.35 points depicting the volatile trend of the Markets.