India started the year on an actionable note by sharply cutting interest rates and unveiling another stimulus package. The Reserve Bank of India lowered its repurchase rate by one percentage point to 5.5%, and lowered the reverse-repurchase rate by one percentage point to 4%.

As part of its stimulus plan, the government eased inflation controls and raised the overseas investment limit to $15 billion from $6 billion. India’s federal government also green-lighted state-level initiatives to raise an additional $6.18 billion (300 billion rupees) in the year to March 31 for infrastructure projects such as roads, schools and hospitals.

The government will also offer $4.12 billion (200 billion) rupees to state-run banks and $5.15 billion (250 billion rupees) to non-bank finance companies to raise capital, The Wall Street Journal reported.

To make this possible, India lowered the cash reserve ratio – the proportion of deposits banks are required

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The tremors from the failure of Lehman Brothers (LEH) are still being felt across the globe in what I feel might be last act in the financial meltdown we have experienced this year. As I read the announcement of Lehman's decision to declare bankruptcy on Sunday night, I watched the Indian stock market crash with the BSE Sensex dropping more than 800 points to 13,150 before recovering to close at 13,531, a loss of 470 points or 3.35%. Much of Europe shared a similar fate with London's FTSE 100 dropping 3.92%. In contrast the 250 to 300 point loss that the Dow posted through most of the trading session on Monday felt like a muted response until things fell apart in the last hour of trading and the Dow Jones Industrial Average closed the day with a loss of ...

“All the things they said would happen to you Don’t you know they’re all coming true Goin’ nowhere fast

“Nothing’s strange as when it seems You’re living out all your worst possible dreams Goin’ nowhere fast”

Beck Hansen’s lyrics might have been written in the late 80s, but global stock markets were dancing to the same despondent tune during August. Gloomy sentiment about credit woes and a worsening global economic picture dampened investor sentiment, resulting in a down-month for most markets. Although the MSCI World Index (-1.6%) managed to hold its mid-July trough, the MSCI Emerging Markets Index (-8.2%) was less fortunate and recorded fresh lows for 2008.

The biggest loser for the month was the Russian Trading System Index, which declined by 16.3%

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