Investors panic as India proposes new legislation

Proposed SEBI restrictions on participatory notes cause markets to turn bearish but sentiment recovers and the rationale for the move draws support from various quarters.

India's stockmarket watchdog has tabled a proposal curtailing unregistered foreign investors from trading in Indian securities. Equities lost ground in early trading on Wednesday but made a significant intra-day recovery as specialists endorsed the logic behind the move.

Equity investors panicked after the Securities and Exchange Board of India SEBI issued proposed new guidelines governing foreign investment in stockmarkets. The main stock index, the Sensex, lost 9.15% after markets opened on Wednesday to fall to 17,308 points, triggering a circuit...

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