|
After a 19,000 high since the last week, the stock market benchmark Sensex crashed by 1,743 points within minutes of opening on Wednesday, leading to deferral of trade for an hour. The National Stock Exchange's wide-based index Nifty also plunged 9.25 per cent to 5,658.90 points. It recovered some of the lost ground when trading resumed and is hovering at 5,394 levels.
The crash is seen as an outcome of regulator SEBI's move to curb the Foreign Institutional Investors that had lead to an alarming rising of the Rupee compared to the US dollar for the last fortnight. Experts are of the opinion that SEBI's move on P-Notes had not gone down well with the markets with the benchmark index hitting the lower circuit breaker in opening moves.
Even as the bull has been rampaging in the markets, SEBI has proposed to curb Foreign Institutional Investors from issuing offshore derivative instruments for which it has sought public comments over the next four days. As part of the proposals, SEBI has suggested directing FIIs to wind up their current positions over the next year and a half, during which the regulator would review the position from time to time.
Financial experts, however, reiterated that things have not changed basically as the companies continued to report good results. The SEBI's move has simply been well deliberated to check volatility in the bullish market, they said.
Top losers among the BSE 30 scrips in noon deals include Reliance Energy (down by 10.3 per cent), Bharti Airtel (down by 7.8 per cent), ICICI Bank (down by 7.2 per cent), NTPC (down by 6.6 per cent), Mahindra & Mahindra (down by 6.4 per cent) and SBI (down by 6.1 per cent). Incidentally, TCS at Rs 1,097 levels moved up 2.7 per cent, Satyam Computer and Infosys Technologies managed to stay afloat in an otherwise weak market.
Incidentally, the shocking plunge comes days after Indian Finance Minister P Chidambaram expressed surprise and concern over the rising stock prices and hoped for things to cool down. After the fall on Wednesday, the Finance Minister tried to allay the fears of investors saying that the move was necessary to moderate capital flows. He said that it was important to moderate capital flows. This is one of the steps in that direction and there is no reason for any alarm.
He further said that the move is a fall-out of a long discussion between SEBI, RBI and the government. According to the Finance Minister, the systems put in place by SEBI have worked and it has been necessary, good and in investors’ interest.
Meanwhile, experts feel that the 350 stocks that are trading as futures would be a cause of concern for sometime till the markets stabilize. However, if the Index moves more than 15% by afternoon then the trading would be halted for 2 hours and in a situation where the Index moves more than 20% then the trading would be halted for the day.
 Add as favourites (32)
Powered by AkoComment Tweaked Special Edition v.1.4.4 |
Finance 
