The new RBI measures and assurances by the government did not have much impact on the market, though. The BSE Sensex ended down 800.51 points or 7.07% to 10,527.86. The index lost 16 per cent during the week, its worst performance since 1990. It is now 10,678.91 points or 50.35% below its all-time high of 21,206.77, struck on January 10, 2008.

ICICI Bank plunged as much as 28 per cent to its lowest in almost four years, before trimming losses to 19 per cent after the bank’s joint managing director Chanda Kochhar said the bank has sufficient liquidity and it has never used rupee funds for its international growth initiatives.

Cutting the CRR to the 7.50 per cent level, the RBI said, “In the context of the abrupt changes in the international financial environment, it is important to note that the macroeconomic fundamentals of the Indian economy are strong and resilient and that India’s financial system is sound, well-capitalised and well-regulated.” Since Monday’s 50-basis point CRR cut, the global situation has worsened further. “International stock markets and money markets had been adversely affected in a significant manner,” the RBI said.

Bank bailouts, liquidity injections and interest rate cuts across the world failed to quell global investor anxiety. Asian and European stocks tumbled — Thailand fell 9.6 per cent, Singapore 7.3 per cent, Philippines 8.3 per cent and Hong Kong 7.2 per cent. Japan’s Nikkei share average tumbled 9.6 per cent, its biggest rout since 1987. Trading was stopped in Austria, Russia, Iceland, Romania, Indonesia and Ukraine, while Milan suspended share dealings in nearly half of its stocks because of excessive losses. The latest woes in Europe came after the Dow Jones index in the US closed 679 points, or 7.3 per cent lower, at 8,579.19 on Thursday, its first close below 9,000 in five years.

... contd.