The Indian markets witnessed a complete sell-off during this week of trade, with the BSE Sensex losing 16%, while the NSE Nifty
lost over 14% on the back of continuous FII selling and extremely weak global cues. The week started on a bearish note, with the
Sensex losing 725 points on Monday on continuing negative global sentiment, doubts about efficacy of the US $700bn bail-out
plan and concerns about the contagion spreading to Europe. Tuesday saw a highly volatile session amidst news of market
regulator, SEBI's move to lift restrictions on the issue of P-Notes and the RBI's 50bp CRR cut. The eventual close was in the red
by over 100 points. Wednesday saw another negative session, with the Sensex losing around 367 points.
Over Wednesday and Thursday, seven global central banks including the US Fed, Bank of England, European Central Bank, Bank
of Korea and the Hong Kong Monetary Authority cut rates in a co-ordinated effort to prevent the credit crisis sparking a global
recession. This did not have any impact, with global markets closing lower. The Sensex followed suit on Friday, getting hammered
by over 800 points after a holiday on Thursday on account of Dusshera. This was the case, even as the RBI cut the CRR by a further
100bp, taking the total cut to 150bp. Over the week, the Sensex lost nearly 2,000 points, while the Nifty fell 538 points.
FIIs have sold a massive Rs4,858cr over the past couple of weeks (over US $1bn). Over the past five sessions of trade, they have
sold a net of Rs3,847cr (US $794mn), leading to this precipitous fall. Even as some good news came in the form of inflation falling
to 11.80% (11.99%) and crude prices falling below US $80/barrel, this was ignored. The week also saw commencement of the
2QFY2009 Earnings season, with Infosys announcing its numbers on Friday. The company's numbers were above expectations,
helped by volume growth and Rupee depreciation. But, the fact that it cut its Dollar guidance to reflect increasing global uncertainty
led to IT stocks losing ground. The IIP numbers for August came in at a dismal 1.3%, adding to the negative sentiment.
