investors-panic-as-india-proposes-new-legislation

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.

Sameera Anand

October 18, 2007

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 breaker which saw authorities suspend trading for an hour.

Comments were made that the correction was one of the largest in the history of the Sensex but equally, to put the fall in perspective, the...

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South Asia