Fri4U

MUMBAI: The stock markets tumbled on Friday, the last day of trading for this week, dovetailing the falling gloomy global markets. The benchmark Bombay Stock Exchange 30-share sensitive index (Sensex) lost about 50 per cent from its all time high of 21206.77 recorded on January 10 this year by closing at 10527.85.

The market dipped 800.51 points or 7.07 per cent from the previous close of 11328.36. The National Stock Exchange index closed at 3279.95, down 233.70 points over the previous close.

Attempts by the Reserve Bank of India (RBI) to assuage market sentiment by pumping in liquidity failed. The central bank assured the market participants that it was ready to respond to any liquidity crunch that might come about in the context of the highly volatile global scenario.

The RBI announced a cut in the cash reserve ratio (CRR), the percentage of deposits banks must keep with the central bank, by 150 basis points from October 11 instead of the half-point cut announced earlier on October 6. The decision was taken after a review of the “evolving liquidity situation in the context of global and domestic developments,” the central bank said.

Consequent to the announcement, the CRR will drop to 7.5 per cent and “as a result of this reduction, about Rs. 60,000 crore will be released into the system, instead of the injection of Rs. 20,000 crore announced earlier.”

However, the attempt appeared a little too late, as stocks continued to take a battering.

The markets lost 1088.60 points in intra-day trading before closing at 10527.85, down 800.51 points or 7.07 per cent. What saved the day of a huge erosion of wealth in equities was the intervention of bargain hunting at the lowest levels.

The BSE realty index led the carnage with a loss of 11.30 per cent followed by consumer durables index (10.11 per cent) and metal index (9.25 per cent). All sectoral indices, including power, banks, information technology and oil and gas ended in the red.

The BSE midcap index lost 334.48 points or 8.34 per cent at 3676 and the small cap index 343.74 points or 7.31 per cent at 4355.45.

The BSE 500 dipped by 317.73 points or 7.47 per cent to 3934.70.

Meanwhile the rupee, which at one stage dipped to 49.30 against the U.S. dollar, recovered to 48.45/46 at close on Friday.