Bloody Friday: Global financial crisis 5th anniversary

Bloody Friday: Global financial crisis 5th anniversary

It has been 5 years since the the global financial crisis (24th October,2008) happened and brought the financial edifices everywhere to their knees and much more led to investors losing billions of dollars of their investments. Sometimes their entire life's savings. The world and the investing community is yet to recover fully,in fact,most of the woes being mapped today have their genesis in Bloody Friday. We chalk out some of the catastrophic market reactions in India and elsewhere:

Every stock market index in Asia,Europe and the US slumped on Bloody Friday. The MSCI World Index fell 4.3%. The index lost 45% in 2008,its worst ever performance. Yields on treasury paper,including those in India,also plunged. Investors across the world dumped equity,migrating to the safety of government paper as concerns spread that despite coordinated action by global central banks and governments,a worldwide slowdown cannot be averted. (Reuters)

Signalling what was eventually a dark Diwali on Dalal Street,as many as 350 securities on Friday hit their all-time lows. The BSE Sensex plunged 1,070.63 points,or 10.96%,its second steepest ever intra-day fall. Sensex dipped below 9,000-mark for the first time in about three years – it closed down at 8,771.70 points. The S&P CNX Nifty of the NSE ended at 2,584 points,losing 359.15 points from its previous close. The broader BSE 200 Index also declined 11% to 1,037.80. (Reuters)

Making things worse,those hitting their record low share prices included big names like Reliance Power,Cipla,Ranbaxy,Ambuja Cement,Hindalco,Indian Hotels,Jaiprakash Associates,Jet Airways,Suzlon Energy and Idea Cellular. (Reuters)

Realty majors DLF Ltd,Unitech,Parsvnath,Sobha Developers,Omaxe and Puravankara also plunged to their all-time lows. (Reuters)

There were also new listings such as REC,Gammon Infra,Titagarh Wagon,V-Guard,Anu's Lab,KSK Energy,20 Microns,Birla Cotsyn,OnMobile,IRB Infra,Aishwarya Telecom,Kiri Dyes and 20 Microns hit record low prices. (Reuters)

Other big names plunging to their record lows included Central Bank,Power Grid,PFC,Edelweiss Capital,Future Capital,Biocon and Patni Computer,GMR Infra,Tech Mahindra,Mahindra Forging and Lanco Infra. (Reuters)

There were as many as 2,322 stocks ending in the red,accounting for close to 90 per cent of all the actively traded stocks. (Reuters)

Besides,as many as 640 stocks hit their lower circuit filters -- signalling there were no buyers for these stocks. (Reuters)

The Reserve Bank of India also left key rates in holding pattern in its mid-term review of monetary policy,offering domestic money and equity markets with nothing to cushion their fall. (Reuters)

As the dollar strengthened against most global currencies,the Indian rupee weakened to a then record 50.165,before closing at 49.96 on the week’s last trading day. The currency lost 2.2% for the week against the greenback. (Reuters)

FPI India, Foreign investment in india, Foreign investors India, India stock market, india debt market loss, fpi outflow, foreign investors in india pull out, india foreign investors, stock market news, business news

The India Vix,the volatility index of the NSE,hit now at 54%,near its annual high,indicating a significant build up of risk perception about the way stock prices will move in the next 30 days. Ironically,liquidity in the financial system improved even further with call rates dropping to less than 6%,which led banks to park Rs 43,650 crore in excess funds with RBI on Friday. This reflected the impact of the central bank’s rate cuts—including of repo by 100 basis points—earlier that week. Analysts said there was little RBI could have done to change Friday’s stock market plunge,even if it had cut rates. (Reuters)

On the markets,Sensex heavyweights like RIL and Suzlon saw consistent selling. RIL dipped to Rs 991,only to recover above the Rs 1,000 mark. State Bank of India shares lost 15% and ICICI Bank fell 14% as RBI’s quiescence disappointed investors who hoped for an improvement in banking stocks. (Reuters)

According to Sebi figures,overseas funds sold a net Rs 347.40 crore worth of shares on October 24,taking capital outflows from India that year to $12.11 billion. As a result,according to RBI data,the country’s total foreign exchange reserves fell by $118 million to $273.87 billion. (Reuters)

Crude fell for the fourth consecutive week to $63 a barrel,despite the cartel of world oil suppliers,Opec,cutting production by 1.5 million barrel on Friday to shore up prices. That alone exemplifies the extent of growing panic in world markets,including India. (Reuters)