India's stocks recover after largest-ever fall

Discussion in 'Wall St. News' started by Optionpro007, May 22, 2006.

  1. Police patrol lakes, canals in India for suicidal brokers following 10 percent stock plunge.
    May 22, 2006: 8:31 AM EDT

    MUMBAI (Reuters) - Indian police are watching out for possible suicides by brokers and investors after a steep market slide wiped out billions of dollars in share values, officials said on Monday.

    Indian shares clawed back to close nearly 4 percent lower on Monday, helped by buying from state-run mutual funds and financial institutions, after the biggest one-day points drop that halted trading for an hour.

    The 30-share benchmark BSE index closed provisionally at 10,536.79 points, or 3.67 percent down, its lowest closing since March 9.

    The Bombay Stock Exchange Ltd. and National Stock Exchange suspended trading for an hour after the market fell more than 10 percent at one point.

    The Bombay exchange which had a market value of $657 billion last week after falling 10 percent in the previous two sessions, slid as much as another 10 percent in early trade on Monday following sales of stocks held by brokers as security on behalf of their clients.

    The 50-issue NSE index ended 4.76 percent lower at a provisional 3,092.30 points, recouping most of a 10.79 percent decline before trade was halted.

    The biggest losers were Tata Motors Ltd., down 8.12 percent at 780 rupees, Larsen & Toubro Ltd., nearly 6 percent lower at 2,350 rupees and Wipro Ltd., down 8.3 percent at 450 rupees.

    Policemen were keeping a watch near lakes and canals, possible places where people in distress could head to kill themselves. They said rescue teams were on alert.

    "A financial crisis can trigger suicides. We are just trying to prevent them. Till now, no such cases have been reported," said R.K. Patel, a police official in the western city of Ahmedabad.

    Ahmedabad is considered particularly vulnerable to stock market volatility.

    "Gold has turned into brass. We are finished," said S.S. Gupta, a middle-aged Mumbai broker who said he had lost millions of rupees in two hours of trading on Monday morning.

    With over five million retail investors, the city is one of India's main trading hubs where people have put in millions of dollars of their disposable income into the stock market.

    "I borrowed money to trade in the market. I lost it all in the past two days," said 37-year-old Sanjay Joshi, a small investor. "I don't know how will I repay my loans."

    In the 1990s, a stock market meltdown led to several bankrupt brokers and small investors committing suicide across India, some of them drowning in rivers or throwing themselves off highrises
  2. were there any reasons given for this drop?
  3. just21


    This could be turning into an emerging market crisis like 8 years ago. Commodity producers are getting hit the hardest.
  4. It's called global liquidity crunch....
  5. The news report doesn't give a balanced picture.

    Indian stocks have been in a major bull market since early 2003. The major indices have gained over 350% (uncompounded) over the last 3 years.

    The fall over the last 3 trading sessions has pared off about 29% of the entire bull run. This correction was long overdue.

    The worst-affected losers in this market crash are obviously those who've disregarded basic investment principles and indulged in uninformed , reckless speculation.
  6. yup... lets wait and see
  7. Gharghur2 (Tony Caldaro) refers to this correction as
    major wave 4 of the bull market.

    If that's so, then major wave 5 should test market highs again and complete the bull market.

    BTW, Tony was a most valuable member at ET ; knowledgeable , modest and helpful. Its a pity that ET decided to take him off ; obviously ET's loss !
  8. You got it. How do you think prices get that high to begin with.
  9. Bob111