New Delhi - India's stock indices dipped downward by more than 3 per cent Monday after a meeting of the world's leading economies failed to throw up any immediate solutions to the global economic crisis and Japan announced its economy had slid into recession. The Bombay Stock Exchange's benchmark 30-share Sensex was trading at around 8,990 at noon, about 4.21 per cent below its previous close.
The broader 50-share S&P CNX Nifty of the National Stock Exchange was hovering around 2,704.80, 3.76 per cent below Friday's close.
All sectors on the Sensex were trading in red, with banking and real estate the worst affected.
The Japanese government announced Monday that its economy had slid into recession for the first time since 2001 joining several European countries.
"Since major economies of the world are in the midst of recession, the slowdown would affect India also. But the Reserve Bank of India is quite pro-active and inflation is also on a decline so Indian markets are relatively better off when compared to developed economies," Sanjay Sachdev of the Shinsei Bank Group was quoted as saying on the NDTV television channel.
Meanwhile, Indian Finance Minister P Chibambaram, talking about the G20 summit, said world leaders had adopted a detailed and ambitious plan to meet the global financial crisis.
He said the impact on the global economy would result in a slowdown in some sectors in India, but immediate rate cuts to increase liquidity were unlikely as inflation, still above 8 per cent, was still not in a comfort zone.
India needs to strike a balance between growth and inflation, he said in an interview to NDTV.
India, one of the world's fastest growing economies, has posted gross domestic product growth of over 9 per cent since 2006. But the forecast for the financial year 2008-2009 has been lowered to 7.5 per cent by government and less than 6 per cent by independent agencies.
