May be the year 2008 was one which people would like to forget off as soon as possible. The Indian share markets almost peaked to 21,000 levels and then started the downfall. The much awaited US recession started to show its adverse impacts right from the very first month of the year. Since Jan 2009 has been falling like a pack of cards and ended the year with almost a loss of 54% over the year in sensex. 48 out of the 50 nifty stocks posted negative returns. over the year. Unlike the last year(2007) when FIIs brought about $17 billion to the Indian markets which pushed it up to show a whopping 47%  in  returns, this year the same FIIs pulled out nearly $13 billion from the Indian markets.

The USA financial system deepened into a severe crisis after huge investment banking companies like Lehman Brother, Meriyll Lynch etc crashed and went bankrupt. Finally USA had to agree that its economy was in a recession and that too since Dec 2007. Strange that it took them almost 12 months to accept the hard fact. All the Asian stock markets were also on a downward roll. Nekkei-225 fell by 42% in this year, Hang Seng was down by 48%, Chinese Composite Index was down by 65% and Russia was the leading one with a fall of 72% this year.

 

The worst came in the Indian markets on Oct 27th 2008 when it touched a 3 years low of 7697 levels from 21,206 levels achieved on Jan 10,2009. FIIs were pulling money badly from the markets and the exposure of ICICI to some of the oversea drafts pulled its stocks down to 28% in intra day on one fine day in October.  The worst hit area was realty pack with all companies from DLF to Unitech posted huge losses this year. Many IPOs were also called off including one from Emaar MGF Land Ltd which came with a 7000 crore offer. The only and partially successful IPO was from Reliance Power.

The year saw a dramatic rise and then a huge fall in crude oil prices. At one point when crude oil peaked $147/barrel analysts were expecting it to touch $200/barrel. But since then it has taken a big dip due to demand slowdown and touched $35-36 levels per barrel. Indian Rupee against Dollar also played a lot of hide and seek. Dollar was once quoted at sub Rs 38 at one point and then touched almost 51 levels. Infact Rupee fell 19% this year making it the biggest loss since 90′s.But amidst all these factors Indian economy somehow avoided the biggest global crisis ever in the world. Even though the effects of the slowdown in USA and world over is very clearly reflecting in India’s growth story, but still then the GDP is expected to grow at about 5-5.5% this year.

Thanks to some of the decision taken by RBI and Mr.Y.V.Reddy sometime back, that we are atleast in a comfortable position today. From here the impacts of slowdown will further come into picture. Some even expect the Indian share markets to touch Oct lows again with a fall of 20-25% from here. Only time will tell the story better.  On the last trading day of the year Sensex lost 68 points to close at 9647 levels and nifty lost 20 points to close at 2959 levels. ICICI has also cut its home loan rates by 0.5% today.It is applicable for both current and existing customers. With a positive hope that the economy and the Indian markets will recover to some extent in the next year, lets bid adieu 2008 !

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