2009 - Welcome...

An optimist stays up until midnight to see the new year in. A pessimist stays up to make sure the old year leaves.”

As the curtains come down on what has been a tumultuous year, one thing is sure, it will go down history as the worst year for markets since the Great Depression. For Indian markets, it surely was by far the most horrific one, dwarfing the stock market collapse in early 1990s and the Dot Com bust. The signs were all very ominous late last year itself, with the implosion of the US housing sector, prompting the Federal Reserve to abandon its tight monetary policy. Bailout plans and stimulus packages worth over $10 trillion has been reportedly unveiled

The housing market crisis slowly snow-balled into a worldwide credit crunch, sending every thing from equity to crude oil tumbling. Global markets, which not too long ago were awash with cash, suddenly found to their horror that money had become a scarce resource. The wildfire sucked some of the storied Wall Street giants, turning the much-vaunted free-market capitalism upside down. The crisis was not limited to the US alone, as most of Europe too got engulfed into it, prompting unprecedented policy response across the globe. However, the regulatory steps proved to be too little, too late.

Soon the liquidity crisis in the markets spread to the main streets, leaving everyone from corporates to households cash strapped. As a result, one nation after the other started slipping fast into recession. The governments and central banks relentlessly worked to mitigate the fallout from the financial crisis, but failed miserably. Though, the authorities did manage to ease some of the strains in the credit markets, banks and institutions remained reluctant to lend. Global equity markets too pulled off a small year-end rally after hitting multi-year lows, including the gains made in the last trading week. However, the scars still remain and will take time to heal.

The Sensex which got off to a scintillating start hit a high of 21,206.77 in Jan 10 ’09 only to come crashing down to 7697 on October 27 ’09. When the closing bell rang today, the Sensex had lost 52.6% or 10,687 points and closed at 9,647.3.

The Nifty shed 52% or 3,196 points to close at 2,959 for the year after hitting a high of 6,357.1 and low of 2,252 during the year.

Crude flared to a high of US$148.8 and crashed or rather cooled to US$35.1 and closed the year around US$37.9 levels. Gold swung between a high of US$1037 and low of US$680 before finishing the year at US$865.8.

Inflation which peaked above the 12% from a low of 4.84% is now hovering around 6.41%. For 2009 it may well turn negative.

The Indian currency swung wildly between a high of 39.3 against the dollar and a low of 52.1 against the greenback before finishing the year around 48.6 levels.

FII sold stocks worth Rs539.09bn

DII were net buyers to the tune of Rs134.45bn

The change that the world needs could well come in the form of Mr. Barack Obama who was elected President of the United States of America.