Business | Markets
Indian stocks, currency fall on financial worries
Indian financial markets fell sharply on Monday, with the stock market slumping to a one-year low and the rupee hitting a five-year low as a spreading global financial crisis triggered fresh bouts of risk aversion.
- Reuters
- Published: 21:36 September 29, 2008
Mumbai: Indian financial markets fell sharply on Monday, with the stock market slumping to a one-year low and the rupee hitting a five-year low as a spreading global financial crisis triggered fresh bouts of risk aversion.
The stock market fell as much as 5.3 per cent to 12,402.84, its lowest since mid-March 2007, before partially recovering to end down 3.9 per cent at 12,595.75, its second lowest close of 2008.
Worries that foreigners were liquidating Indian investments to repatriate funds saw the rupee fall to 47.11 per dollar, its weakest since early June 2003, according to Reuters data.
"There is a lot of uncertainty with the US bailout package and now it seems the crisis has spread to Eur-ope," said R.K. Gupta, managing director at Taurus Mutual Fund who manages assets worth $80 million.
Dealers said a bank holiday today, the fiscal half-yearly closing when banks balance their books, exacerbated the moves. Stock positions were cut and there was heavy dollar demand from importers, especially oil refiners, the biggest buyers in the local market, they said.
Currency and debt markets are shut today. There will be no stock settlement, although the market will be open for trade. Stocks in Asia and Europe declined heavily as fallout from the credit crisis hit Europe's banking sector, forcing partial nationalisation of two banks and leaving investors to ponder the impact of a US bailout plan.
In India, leading private bank ICICI Bank dropped 12.1 per cent to its lowest close in more than two years. The partially convertible rupee closed at 46.95/96 per dollar, recovering some of its fall on heavy central bank intervention that some traders put at more than $1 billion, from Friday's close of 46.545/55.
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