Sensex falls more than 5% on liquidity scarcity. Global stock market problems and selling by Foreign Institutional Investors
Sandeep Roy
Feb. 11, 2008

The 30-stock benchmark Sensex plummeted by 833.98 points at 16,630.91, after touching the day's low of 16,457.74 and a high of 17,427.34 points. National Stock Exchange index Nifty dropped by 263.35 points at 4,857.00 as almost all index-linked stocks fell sharply. It touched the day's low of 4,803.60 and had a high of 5126.40 points.

The main problem with Indian the stock market is lack of global liquidity. The real value of Sensex is close to 5,000. Yen dominated carry trade and liquidity from the Western financial institutions created the massive bubble in Indian stock market. The hedge funds and private equity funds that funded the bubble are now on the run. They are bleeding in their own countries and pulling out from Indian stock market rapidly.

Stocks of metal, capital goods, oil, gas, realty, public sector undertaking, and banking sectors suffered the maximum.

Sensex falls more than 5% on liquidity scarcity. Global stock market problems and selling by Foreign Institutional Investors
Sandeep Roy
The main problem with Indian the stock market is lack of global liquidity. The real value of Sensex is close to 5,000. Yen dominated carry trade and liquidity from the Western financial institutions created the massive bubble in Indian stock market.
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Reserve Bank of India tells ICICI Bank, HDFC Bank, Yes Bank, Citi, Deutsche, Standard Chartered, HSBC and ABN Amro to stop selling exotic forex products
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