Mumbai: Indian stocks went into a tizzy as global financial market turmoil intensified, triggered by the US credit downgrade, and investors lost over Rs 1 lakh crore but found a safe haven in gold which crossed Rs 25,000.
Tracking the tumultuous events, the rupee fell 23 paise against the dollar, providing some relief to exporters. The government, the Reserve Bank and the Planning Commission sought to calm the investor nerves by assuring them of pushing reforms, domestic growth and consumption.
"We will focus on encouraging greater domestic consumption and give impetus to the drivers of domestic growth," Finance Minister Pranab Mukherjee said.
"India's growth story is intact and its fundamentals are strong. We are in a better position than many other nations to manage this challenge," he added.
Markets were hit hard and sent the BSE Sensex spiralling down 316 points to below the 17,000-level for the first time in 14 months. Sensex partly recovered from intra-day losses of nearly 550 points after Mukherjee's statement, but still lost 315.69 points and closed at 16,990.18 -- the lowest since June 10, 2010.
As a result, investors lost nearly Rs 1,00,000 crore in in a single day, which has taken the total damage in the past five trading sessions to an estimated Rs 5,00,000 crore.
The losses, measured in terms of decline in value of all listed stocks, were as high as Rs 2 lakh crore when the Sensex had plunged to the day's lowest level.
The rupee, on other hand, fell by 23 paise to nearly six week low of 44.97/98 against the dollar, after dipping below the 45-level, as global investors took out funds from stocks.
Gold breached the Rs 25,000-level for the first time tracking strong trends in global markets where financial uncertainty increased the metal's appeal as a safe investment haven.
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