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BSE Sensex plunges 11 pct to 3-year low

Fri Oct 24, 2008 6:15pm IST
 
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By Sumeet Chatterjee

BANGALORE (Reuters) - The BSE Sensex fell 10.96 percent on Friday, its biggest fall in 4-½ years, on disappointment the Reserve Bank of India (RBI) did not ease policy further and as a global market rout triggered a flight from risky assets.

Reliance Industries, India's most valuable firm, dropped 16.4 percent to its lowest close since Aug. 2006, and ICICI Bank, which has been overtaken as the most valuable private bank by HDFC Bank, lost 15.2 percent to its lowest in nearly four years.

"It's a black day. People are confused, scared and worried," said Arun Kejriwal, strategist at research firm KRIS. "They don't want to buy shares even if they are getting it almost free, and they can't exit the market at these levels also."

The main 30-share BSE index dropped 1,070.63 points to 8,701.07, its lowest close since November 23, 2005. It fell as much as 12.3 percent during trade.

The 10.96 percent plunge was the index's biggest daily fall since May 17, 2004. All 30 components lost ground, with 20 stocks shedding more than 10 percent.

The benchmark dropped 12.8 percent on the week, falling for the fifth consecutive week and taking it losses for the year to 57 percent, making it one of the worst performing Asian markets.

"It's useless to take about the market's bottom in this kind of a scenario, but it's confirmed that the recovery will be very, very painful and every rise in the short term will be accompanied by excessive selling pressure," Kejriwal said.

"The confidence in the market has gone completely."  Continued...

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