Stock market revives following Chidambaram’s statement (Lead:Markets-Stock Market)

November 14th, 2007 - 2:23 am ICT by admin  
Almost an hour back, the Sensex was at 17,793.84, down 1,258 points, but up from the low of 17,308. The Nifty recovered to 5273, still down 395 points, but up from a low of 5,107.

Earlier in the day, the Finance Minister has ruled out any ban on the investment via PN and had assured that the Securities and Exchange Board of India’s (SEBI) proposal on the PN is to moderate investment coming from abroad.

Welcoming investment via the PN, Chidambaram said that he was surprised to see that the certain section of media was raising alarm over the performance of the stock markets, adding, there is no need to raise an alarm, and that he expected that the initial sense of alarm would “quieten” by the end of the day.

He went on to say that the move is the culmination of measures discussed between the SEBI, the Reserve Bank of India (RBI) and the Central Government.

This morning, the Sensex opened with a negative gap of 1,014 points at 18,038 and the trading at BSE was stopped for an hour. The NSE Nifty opened 284 points lower to 5384.

Reliance Energy slumped over 12 per cent to Rs 1,700. ICICI Bank and NTPC have plunged around 9 per cent each to Rs 1,052 and Rs 211, respectively.

Bharti Airtel plunged by 8.5 per cent to Rs 1,015. SBI and Mahindra and Mahindra shed 7.7 per cent each to Rs 1,775 and Rs 753, respectively.

Tata Steel, Tata Motors, HDFC, Hindalco, Reliance Communications, ONGC, Larsen and Toubro, ACC, BHEL, Maruti and Ambuja Cements have dropped 6-7 per cent each.

TCS and Satyam have soared around three per cent each to Rs 1,102 and Rs 463, respectively. Infosys is the other gainer among the index stocks at Rs 1,880.

According to stock market experts, the Sensex may witness an over 2, 000-point fall today and if Nifty crosses 5, 000 marks then one has to be very cautious about the bulls.

However, some feel that investors should not panic because of a 10-20 per cent fall in the markets that have risen to over 80 per cent.

The SEBI has proposed to tighten the rules for purchase of shares and bonds in Indian companies through the participatory note route. The draft guidelines say foreign institutional investors (FII) and their sub-accounts cannot issue or renew participatory notes with underlying as derivatives with immediate effect. They have to unwind their current position within 18 months. (ANI)

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