MUMBAI: Shares fell 10.96 per cent on Friday, their biggest fall in 4-½ years, on disappointment the central bank did not ease policy further and as a global market rout triggered a flight from risky assets. Reliance Industries, India’s most valuable firm, dropped 16.4 percent to its lowest close since Aug. 2006, and ICICI Bank, which has been overtaken as the most valuable private bank by HDFC Bank, lost 15.2 percent to its lowest in nearly four years.

“It’s a black day. People are confused, scared and worried,” said Arun Kejriwal, strategist at research firm KRIS. “They don’t want to buy shares even if they are getting it almost free, and they can’t exit the market at these levels also.”

The main 30-share BSE index dropped 1,070.63 points to 8,701.07, its lowest close since November 23, 2005. It fell as much as 12.3 percent during trade.

The 10.96 percent plunge was the index’s biggest daily fall since May 17, 2004. All 30 components lost ground, with 20 stocks shedding more than 10 percent.

The benchmark dropped 12.8 percent on the week, falling for the fifth consecutive week and taking it losses for the year to 57 percent, making it one of the worst performing Asian markets.

“It’s useless to take about the market’s bottom in this kind of a scenario, but it’s confirmed that the recovery will be very, very painful and every rise in the short term will be accompanied by excessive selling pressure,” Kejriwal said.

“The confidence in the market has gone completely.”

The 50-share NSE index fell 12.2 percent to 2,584.00, its lowest close since Nov. 22, 2005.

Global stocks tumbled to a new five-year low, with U.S. stock index futures tumbling sharply in European trade and they had to be frozen at several points in the morning indicating a massive sell-off on the Wall Street.

India’s central bank, having cut its key lending rate by 100 basis points and slashed banks reserve requirements over the past two weeks, disappointed investors when it did not announce any new measures to shore up markets or the economy at a scheduled policy review.

“The market was also expecting some liquidity measures especially for sectors like real estate that have been hit very badly,” said Neeraj Dewan, director at Quantum Securities.

Traders said the slide was unlikely to be halted without foreign buying. Foreign funds have sold a net $12.2 billion of shares in 2008, after buying a record $17.4 billion last year.

Weakened by the foreign selling, the rupee fell past 50 per dollar to a record low on Friday, taking its losses this year to more than 21 percent.

NEVER AGAIN

Top lender State Bank of India fell 12.7 percent to 1,156.35 rupees, with it and ICICI both weighed down by concerns about their earnings ahead of their quarterly results on Monday.

SBI is expected to post a 16 percent profit rise while ICICI’s earnings are likely to slip for a second quarter, but investors will be focusing on risks to asset quality.

Dealers said scores of retail investors, who rushed into the stock market last year hoping to join the gold rush after the indices hit a series of record highs, had been hit very badly.

“I had invested about 200,000 rupees ($4,000) in November last year in stocks after I saw some of my colleagues making huge amount of money within a short period of time,” said Amit Puri, 35, a technology professional with a private firm in New Delhi.

“Today, the value of my stocks are down by more than half,” he said. “I can’t even sell those stocks now and get out of the market because at this point in time they are worth a pile of scrap. I will never venture into markets again in my life.”

STOCKS THAT MOVED

* Realtor Unitech plunged as much as 51.3 percent to 30.10 rupees, its lowest close since April 2006, even after the company denied a media report it had defaulted on payments for land near Delhi. It is down 93.8 percent this year.

“Unitech is currently not in default and was never in default with regard to payments to the authority,” it said in a statement to the Bombay Stock Exchange.

* Suzlon Energy, the world’s fourth-largest wind turbine maker, fell 39.2 percent to a record low close of 47.25 rupees. The company said a blade on a turbine in the United States had broken accidentally, saying it was “an extremely rare and unusual incident.”

* Tata Consultancy Services dropped 10.5 percent to 490.20 rupees and Wipro ended down 13.6 percent at 235.15 rupees on worries a global economic slowdown will crimp outsourcing.

* Maruti Suzuki tumbled almost 10 percent to 533.55 rupees, after India’s top car maker posted a worse-than-expected 37 percent fall in quarterly net profit, as high raw material prices and higher depreciation outweighed higher sales.

TOP THREE BY VOLUME

* Suzlon Energy on 24.8 million shares

* Unitech on 23.4 million shares

* Hindalco Industries on 17.8 million shares

source: Economictimes

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