VR Logo

Goodbye October

Goodbye October

No one really doubted that today would be a good day. A 1% interest rate cut by the U.S. Federal Reserve and its announcement of multi-billion-dollar currency swaps with central banks in Brazil, Mexico, South Korea and Singapore sent Asian stocks soaring yesterday. Thursday was a holiday in India and the stock market was shut.

U.S. was not the only economy to announce a rate cut. Japan, China, Taiwan and Hong Kong also announced the same. Speculation is growing that the European Central Bank and the Bank of England could announce fresh interest rate cuts next week.

Besides the positive global cues, declining inflation and good buying on the first day of new derivative contracts added to the overall sentiment. 

The Sensex surged to touch a high of 9870 but profit booking pushed it down to 9361 before closing at 9788.

The good news is that the Sensex rose 12.5% this week. The bad news is that it lost 23.9% this month. The last such show was seen in May 1992 when it fell 22.7% (Thomson Reuters Data). This year, the index is down about 52%, making it one of the worst performing markets in Asia.