More losses expected

Investors and speculators watched the Indian stock markets crash and a key index dip to the four-digit level with a distinct sense of déjà vu during the week ended Friday with sentiments completely battered by the fears of a US recession and an overall global slowdown.

Looking ahead, they feared more losses in the ensuing sessions, since some key measures by India's Finance Ministry and the central bank to infuse additional liquidity into the country's financial system over the past week had failed to lift the market sentiments.

As the market saw one of the worst drubbings in recent years, the sensitive index (Sensex) of the Bombay Stock Exchange (BSE) ended with a loss of 5.25 percent over the week, completely negating the impressive gain of 7.42 percent and 1.54 percent, respectively, during the first two days of trading.

"The fall was in line with what is happening across the globe. I'd expect the market to touch 9,500 points by next week," said Amitabh Chakrabarty, president of Religare Securities.

On most of the five trading days of the week, Finance Minister P Chidambaram sought to calm the nerves of anxious investors, saying there was no need to fear and that steps had been taken to infuse additional liquidity into the coffers of commercial banks to help them extend more corporate credit.

And the statements did work on the first two days.

But on each of the last three days of trading during the week, the index took a major beating - falling as much as 606.14 points, or 5.73 percent, on Friday alone.

The Sensex, which was ruling at an all-time high of 21,206 points barely nine months ago, has fallen nearly 25 percent over the past month and more than 45 percent over the past 52 weeks.

As many as 24 out of 30 shares that go into the Sensex basket ended with losses. The other six were led by Hindustan Unilever, up 8.56 percent and ICICI Bank, up 7.58 percent.

Hindalco led the losers, down as much as 20.40 percent over the week, followed by Tata Motors, down 16.49 percent, Oil and Natural Gas Corp, down 15.28 percent, Reliance Industries, down 14.52 percent, and Tata Steel, down 13.67 percent.

Foreign funds, which have been the main drivers of India's stock market upswing in recent years, were net sellers of equity in Indian bourses on each of the five days of trading this week, pulling out over a billion dollars.

These foreign institutional investors have been net sellers of equity worth USD 2.46 billion in October and USD 11.56 billion during the calendar year, latest data with the markets watchdog showed.

"There is a lack of interest from foreign institutional investors as well as retail investors due to the financial meltdown," said Ashok Jainani, head of research with Khandelwal Securities.

"Everybody is holding back on investing, as most of them feel the market will crash further."