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After biggest-ever crash; Sensex recovers
October 17, 2007
The Sensex opened with a huge negative gap of 5.3% (1,014 points) at 18,038.
SEBI, in a discussion paper, had mooted curbing issuance of Offshore Derivative Instruments by FIIs and sought public comments by October 20. SEBI chairman M Damodaran said the proposals were a well- designed package and asked investors not to go by rumours.
Chidambaram also alluded that Indian stocks are cheaper despite the market gaining new heights, saying: "Our PE ratio are still far lower than the PE ratios of say
The number of FIIs and their agents issuing ODIs has increased to 34 from 14 and notional value of PNs outstanding has risen to Rs 3,53,484 crore (Rs 3534.84 billion) as of August this year from Rs 31,875 crore (Rs 318.75 billion) in March 2004.
The financial instruments PNs are used by investors or hedge funds not registered with SEBI, to invest in equity, market players said.
Chidambaram has expressed surprise and concern about the recent surge in the market, saying "our assessment tells us that Sensex is driven by copious inflow of funds".
"We needed a correction... it may be good for the market but the sharp recovery is a little baffling," Arun Kejriwal of Kejriwal Research and Information Services (KRIS) said.
RIL [Get Quote], Infosys [Get Quote] Tech, Satyam [Get Quote] Computer and TCS [Get Quote] Ltd scored impressive gains. Barring BSE IT index which gained 1.02 per cent, other sectoral indices registered losses.
"While, the medium to long term outlook is quite good, SEBI has banned only unidentified flows into the country," said Paras Bodhra of Asika Stock Brokers.
A stock trader reacts while watching the 30-share Sensex index after it plunged 1,743.96 points.
PTI & Business Standard