“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 Wednesday.

1. Jitters continue, Indian equities markets close in red
Posted: 5:27p.m IST, October 22, 2008
Mumbai, Oct 22 (IANS) After two successive days of gains, Indian equities markets once again
closed in the red Wednesday following weak global cues and general nervousness, analysts
said.The benchmark 30-share sensitive index (Sensex) of the Bombay Stock Exchange finished
at 10,169.90, down 513.49 points or 4.81 percent from its previous close Tuesday at 10,683.39
points.
The Sensex opened weak at 10,455.23 points, down 228.16 points or 2.14 percent from its
previous close Tuesday, touched a high of 10,484.85 before sliding steadily.
The broader 50-share S&P CNX Nifty index of the National Stock Exchange (NSE) also showed
a similar trend - opened weak, down nearly 50 points and dipped to shed nearly 150 points
before beginning a weak recovery only to slide again to end at 3065.15, down 169.75 points or
5.25 percent from its previous close 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 closed at 3,490.39, down 96.85 points or 2.70 percent from its previous
close Tuesday at 3,587.24 points.
The BSE smallcap index finished at 4,111.69, down 84.59 points or 2.02 percent from its
previous close at 4,196.28 points.
Except for the fast moving consumer goods sector index all other sectoral indices notched up
losses.
The biggest losers were metals, realty, banks and oil and gas in that order.
Among the stocks that make up the Sensex only two scrips posted gains. ITC Ltd. gained 1.04
percent and Hindustan Unilever Ltd. gained 0.50 percent.
Among the losers, Tata Steel lost the most shedding 12.04 percent followed by Sterlite Industries
losing 10.04 percent, Reliance Communications 8.79 percent and ICICI Bank 8.04 percent.
As many as 1,733 or 66.96 percent scrips declined, 778 or 30.06 percent advanced and 77 or 2.98
percent remained unchanged.

2. 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.
“This downturn is not just an event or a war - it involves psychological and cultural issues - the
very foundations of the global financial system have 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 Wednesday.
Markets posted losses around the world. Even as Indian investors slept 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 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 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 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.