In response, Finance Minister P Chidambaram, who is en route to Washington, DC for a meeting of the IMF and the G-20, reiterated that Indian banks were in no danger, as their capital adequacy ratios were 10% or higher, above the 9% required by BASEL norms. In particular, he assured depositors that ICICI Bank (IBN) was not going to collapse and has no shortage of liquidity. In spite of that, the stock closed down 19% on the BSE.
In the rest of Asia, turmoil continued. The Nikkei-225 (.N225) in Tokyo collapsed further by 9%, below 9,000. According to a broker in Tokyo, fundamentals no longer matter and no one dares buy anything, although many stocks look attractive. All other Asian markets were down, with China's Shanghai Composite losing 5%. In even more disturbing news, India's growth rate has slowed down significantly in the past few months, according to new data. And, data shows that one of Asia's largest economies, Singapore, is now in recession.
The only good news is on the commodities front. Oil (NYMEX, Nov. delivery) plunged to a 52-week low of $83/bbl and is expected to fall even further. India's inflation rate fell to 11.80% against last week's 11.99% and a 52-week high of about 12.42%. Gold (bullion, 10 gram) surged to a new high of above Rs. 14,000 in Mumbai ($932/ounce) as investors ran to gold, considered a hedge in times of crisis.