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Global worries continue to haunt markets

business Updated: Aug 11, 2007 11:53 IST

Global liquidity crunch continued to cast a shadow on the Indian bourses as the bellwether indices fell by more than 1.5 per cent in the week under review on sustained batterings.

The domestic markets went into a tailspin after over a 400-point bounce at midweek as US subprime mortgage problems re-emerged with BNP Paribas reportedly suspending three funds in moves linked to high risk subprime property loans.

The Bombay Stock Exchange (BSE) barometer Sensex witnessed high volatility and moved wildly in a range of 15,542.40 and 14,570.89, a more than one month low as global worries caused jitters among investors.

The Sensex, however, withstood the shock and recovered about 50 per cent losses from its lows on Friday and ended the week at 14,868.25, a net fall of 270.15 points or 1.78 per cent from last weekend's close of 15,138.40.

Similarly, the broad-based S&P CNX Nifty of the National Stock Exchange (NSE), which touched an intra-trade low of 4,239.20, later ended the week at 4,333.35 from previous weekend's close of 4,401.55.

The market had showed signs of bullish trend when the Sensex soared by 375 points on Wednesday after US Federal Reserve kept interest rates unchanged and painted a positive outlook for the US economy.

Indian bourses turned highly volatile following a global storm caused by the US subprime mortgage crisis, which is largely attributed to defaults arising out of loans made to customers with low creditworthiness and history of defaults.