Indian equities in red again on global nervousness
Mumbai (IANS): Despite the Indian government still being in a denial mode claiming the global financial
tsunami is just one more turbulence that the economy will weather, Indian equities markets by tanking
once again on Wednesday proved that the shivers going down the spine of Indian as well as global
investors will not subside in a few days or months but may take a couple of years, analysts said.
Mid-afternoon the benchmark 30-share sensitive index (Sensex) of the Bombay Stock Exchange was ruling
at 10,281.99, down 401.40 points or 3.76 percent from its previous close on Tuesday at 10,683.39 points.
“This downturn is not just an event or a war - it involves psychological and cultural issues - the very
foundations of the global financial system has been shaken,” Jagannadham Thunuguntla, head of the
capital markets arm of India's fourth largest share brokerage firm, the Delhi-based SMC Group told IANS
on Wednesday.
The Sensex opened weak at 10,455.23 points, down 228.16 points or 2.14 percent from its previous close
on Tuesday, touched a high of 10,484.85 before sliding steadily.
At the National Stock Exchange, the broader 50-share S&P CNX Nifty index also showed a similar trend -
opened weak, down nearly 50 points and dipped to shed nearly 150 points before beginning a weak
recovery to reach 3096.05, still down 138.85 points or 4.29 percent from its previous close onp Tuesday at
3234.90 points.
Both midcap and smallcap stocks were also in the red reflecting a general nervousness pervading the
market.
The BSE midcap index was at 3,516.23, down 71.01 points or 1.98 percent from its previous close on
Tuesday at 3,587.24 points.
The BSE smallcap index was at 4,129.69, down 66.59 points or 1.59 percent from its previous close at
4,196.28 points.
Even as Indian investors slept on Tuesday night, the New York Stock Exchange and the Nasdaq - the
market for technology stocks - witnessed paring of equity values once again after posting gains on Monday.
Key indices of these markets lost 3.76 percent and 4.14 percent even as the three-month London
Interbank Offered Rate (Libor), the interest rate banks around the world charge to lend funds to one
another, fell to 3.83 percent Tuesday, according to the British Bankers' Association in London.
The rate was down from Monday's level of 4.06 percent.
The one-month rate dropped to 3.53 percent, from 3.75 percent, and the overnight rate fell to 1.28
percent, from 1.51 percent.

The Libor decline follows on the heels of the Bank of England's move to lighten its lending rules and make it
easier for banks to obtain financing: Banks can borrow overnight from the central bank at a rate of 0.25
percent over its interest rate, which is currently 4.5 percent.
The Indian central bank, the Reserve Bank of India (RBI) had also cut on Monday its repo rate - the rate at
which it lends to other Indian banks - by as much as 100 basis points to 8 percent from 9 percent earlier.
A similar disregard for central bank moves and government assurances and bail out moves was seen in
Asian markets on Wednesday morning even before the Indian markets opened.
The Nikkei, key equities index of the Tokyo Stock Exchange was down 6.79 percent Wednesday morning
while the Hang Seng, key equities index of the Hong Kong Stock Exchange was down 2.86 percent.
There is simply no conviction and confidence among investors anywhere in the world, analysts said
explaining why despite so many central bank and government level moves around the world including
India, markets still remained jittery.