Unprecedented Losses posted by top financial services firms on Wall Street pushed global stock markets into a tailspin and India could not hold on despite strong third-quarter results by domestic companies. January has not brought in the traditional foreign fund flows that one witnessed in the last few years and to the contrary foreign portfolio investors have been net sellers.

The Prime Minister’s Economic Advisory Council’s lowering of economic growth projection for 2007-08 to 8.9 per cent on Thursday 17 January 2008 also impacted the market sentiments.
The Sensex was down 10 per cent from its all-time high of 21,206.77 as it plunged below 19,000 during the day’s trade. The Sensex ended the day 3.49 per cent lower at 19,013.70 and the Nifty was down 3.52 per cent at 5,913.20. With five consecutive days of fall, the Sensex closed the week with an 8.7 per cent loss, the worst since May 2006.
“Selling pressure was intense, even in the first half hour’s trade. Domestic institutions were on the sidelines. The only hope now for the markets to stabilise lies with George Bush,” said experts, referring to the anticipated special package from US President George Bush to shore up the US economy. Banks were major losers as the US subprime losses cast a shadow and other sectors badly hit were real estate and oil. Inflation inching up again brought down hopes of any rate cuts, adding to the somber mood. Foreign funds sold stocks worth over Rs 4,465 crore in the last two days. A positive Budget is the only trigger, which is 40 days away.
Sensex heavyweights Reliance and ICICI Bank shed 6.6 per cent and 5.6 per cent, respectively. Wipro, which reported profits a little lower than market expectations, ended the day nearly 1 per cent lower, extending losses. Ranbaxy was one frontline stock that posted a gain of 5.10 per cent after it said it was likely to end the year with 25 per cent profit growth.
Extending their losses for the fifth day in a row, the stock markets collapsed today with the benchmark Sensex posting this year’s biggest fall of over 680 points as selling pressure intensified across the-board on global cues and diversion of funds to the primary market.
Market leader and heavyweight Reliance Industries and other blue-chip stocks, including DAL, NTPC, ICICI Bank, Reliance Energy, suffered significant losses on sustained selling pressure. With markets tanking 1,813.75 points in the last five days, companies have lost over Rs 5 trillion in valuation.
Continuing weak global cues - triggered by huge sub-prime losses disclosed by Citigroup and Merrill Lynch - and the lowering of domestic economic growth forecast by the Prime Minister’s Economic Advisory Council yesterday seem to have triggered the collapse.

The 30-share BSE barometer continued its slide at opening and even went below the 19K level during intra-day. Finally, the index settled the day at 19,013.70, a fall of 687.12 points, or 3.49 per cent, from previous close.
Investors’’ wealth-measured in terms of cumulative market capitalisation of all the listed firms-has declined by Rs 5, 21,310 crore on account of the five-day slide. The National Stock Exchange index Nifty also plunged by 207.90 points, or 3.52 per cent, to close at 5,705.30.
There has been one side selling in the market, mainly driven by the global cues. Once the market falls, a chain reaction of losses is triggered which takes it down further.