@mikeJB
Well hello there, thanks for posting on this topic I was badly looking to talk about this with someone sensible but most here don't even know what indices are.
I am an Indian so I don't follow Dow/Nasdaq/other American indices much, but we have a very similar situation here, I will try to tell you our story.
12th March Our benchmark index (Nifty) fell the most in a single day (9%) , and even today Match 13th it fell even more (10%) as soon as the markets opened, triggering a lower circuit @10%.
Now that u know the backdrop it is safe to assume that u can predict the erosion of wealth from Indian Economy with all the FIIs pushing us into Bear Territory. Now analysts here have a say that to avoid any further erosion, the government may infuse capital back in the stock market by way of Govt Undertakings and advising mutual funds (this has actually happened before here). So if these entities buy the scrips at cheap prices, what happens is it restores the faith of both FIIs and Domestic Investors, who in reutrn pump money in the market, thus avoiding more loss.
The whole point of govt backed buying of stocks at such time being to prevent the economic slump.