BOMBAY, 16 September — This has been a horrible week, not only for the US but for the entire world. The Indian economy naturally experienced effects from the terrorist attacks.
On Monday, the day before the attack, the BSE closed at 3,183.63.
In his opening remarks at the meeting of the Economic Advisory Council in New Delhi, the prime minister warned that the strong indicators of macro-economic health could not hide deeper economic maladies. Selling pressure continued with fears of FII withdrawals. Foreign banks are said to be purchasing dollars for foreign funds which has accentuated the rupee’s fall.
On Tuesday the BSE reported losses and closed at 3,150.40 and the NSE at 1,025.60. On Wednesday, the day after the attacks, the BSE fell 117.69 points to close at 3,032.71 and the NSE at 982.20, losing 41.20 points from the previous day’s close.
Securities and Exchange Board of India (SEBI) tightened the circuit breaker limit to 10 percent on the major indexes and 53 leading scrips. Almost all the 30 BSE Sensex scrips ended negatively.
Tech stocks were the worst hit. Software stocks, which earn most of their revenues in the United States, saw massive selling following fears in the aftermath of the terrorist attacks.
Refinery stocks lost ground with concerns that the surge in global crude oil prices would hit their margins. The oil exploration PSU, ONGC, bucked the trend with modest gains with expectations of a rise in international oil prices.
On Thursday the BSE fell to 2,987.50, its lowest closing since Dec. 24, 1998. The NSE was down 12.50 points to 969.70. Selling continued unabated on almost all counters.
The Indian rupee sank to a new low of 47.57 in intra-day trades as demand for dollars continued from importers and foreign funds. Software stocks, continued to fall to new lows.
Reliance Industries (RIL) and Reliance Petroleum (RPL) lost ground on reports that the company’s proposed $1 billion GDR issue might be put on hold.
On Friday the BSE lost another whopping 157.38 points to close the week at 2,830.12. The NSE lost 50.60 points to close at 921.10. The BSE has thus fallen 318.80 points in the three sessions after the attacks in New York and Washington.
There was immense concern about rising oil prices on the Indian economy as the country imports nearly 70 percent of its requirements.
Gold was at Rs.4,575/- per 10 gms and Silver was at Rs.7,225/- per Kg.
US dollar at Rs.47.64, pound sterling at Rs.69.67, Deutsche mark at Rs. 22.02, euro at Rs.43.07, UAE dirham at Rs.12.93, Kuwaiti dinar at Rs.155.60, Bahraini dinar at Rs.126.01, Saudi riyal at Rs.12.66, Qatari riyal at Rs.13.05 and Omani riyal at Rs.123.40.