Markets decline 3% in February

Bears again took control over the Indian markets in February 2011. Unrest in Egypt over resignation of President Hosni Mubarak, concerns of political instability over the 2G spectrum scandal coupled with violence in Libya leading to a rise in crude oil prices disrupted the investor sentiment. Crude oil prices touched the 30-month high level on unrest in Libya while 2G scam also created havoc after former telecom minister A Raja alongwith his private secretaries and DB Realty’s Managing Director Shahid Balwa were arrested by the Central Bureau of Investigation. Foreign institutional investors (FIIs), the key drivers of Indian markets, reduced their exposure owing to such tensions leading to a further decline in markets. India’s index of industrial production (IIP) data fell to 1.6% for the month of December 2010 as compared to 2.7% seen in previous month also weighed on the markets.