In one of the largest declines in Indian stock market history, the Indian markets on Friday are down by more than 1,000 points. The Asian markets as well as the markets in the US and Europe were also down amidst fears of a slowing global economy and recession.
The Bombay Stock Exchange is currently trading at 8794.80, which is 976.90 points odnw or 9.90%, while National Stock Exchange is down to 2623.70, which is 319.45 points down or 10.85%.
Japanese market Nikkei 225 is also down by 811.90 points to 7,649.08 (9.60%), while South Korea's Kospi Index fell by 10%, as the Korean economy grew at the slowest pace in four years.
Meanwhile, Finance Minister P Chidambaram said the RBI's policy decision to keep rates steady was on expected lines. He said the RBI would infuse liquidity and if required, would adopt conventional and unconventional tools.
Chidambaram said, RBI will continue to manage financial price stability along with sustainable growth. He asked investors to remain calm and not resort to panic selling in the market. Meanwhile, Dr. D. Subbarao, Governor, Reserve Bank of India annoncing the Mid-term review of Annual Policy For The Year 2008-09, reflected on a few aspects concerning the economy in general and the banking sector in particular. The key highlights of his speech include:
India's financial sector stable, no direct exposure to subprime
Marked To Market (MTM) Losses of Indian banks and their foreign counterparts is modest
Overall CAR ( Capital Adequacy Ratio) of Indian Banks 12.7%
Repo Rate Cut has substantially infused liquidity into the markets
Interbank rate have softened to below the repo rate
Interbanking operations in India have been functioning orderly