US index's eerie coincidence spooks Indian stock market

The Dalal Street was on Tuesday abuzz with an eerie coincidence that took place last night in the Wall Street, the US stock market, with its benchmark index S&P 500 closing at a level exactly same as that of October 3, 2008.

The US market index had ended the day at 1,099.23 points on October 3, 2008, and three years later the closing level was exactly same on October 3, 2011.

The coincidence led to the stock markets across the world, including in India, searching for similar coincidences in their trading patterns amid fears that the markets could be heading for a downslide similar to the one witnessed in October 2008.

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What added to the discomfort of the marketmen was the fact that a closing of 1099.23 on October 3, 2008 was followed by a sharp plunge in the next five trading sessions taking the index to below 1,000 level and to as low as 899 points by October 10.

The coincidence is equivalent to any investment based on the S&P 500 index yielding zero returns between the three-year period beginning October 3, 2008.

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However, the things stand better as of now in India as the Sensex stood at 12,526.32 points on October 3, 2008 and nearly 3,500 points higher at 16,151.45 points on October 3, 2011.

In today's trade, the Sensex fell further to 15,864.86 points and has lost more than 800 points in three days.

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However, the Sensex had also fallen sharply in the days following October 3, 2008, and had plunged to below 10,000 level within days on October 17 that year.

After falling further to near 8,500 level, the Sensex regained 10,000 mark by early November that year but could not sustain the level and lost further momentum in the following months.

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By March 2009, it was trading close to 8,000 level and returned above 10,000 level on a sustained basis only by April 2009.

The S&P 500 index has also been on a topsy-turvy ride since hitting the lows of October 2008. During these three years, it has fallen below 700 points and has also moved close to 1,400 points during its uptrend.