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Volumes plunge on first day of badla ban

Our Bureau

MUMBAI, July 2

VOLUMES plunged and stocks tanked on the first day of the new era in Indian stock markets, the introduction of rolling settlements and ban on badla (carry forward) system. Activity in the derivatives market also was pathetic as today's market proved the Cassandras of doom right.

As if this was not bad enough, the rupee also came under pressure as the greenback pushed it to close at record low of Rs 47.15 to a dollar. Japanese stocks also got hit by Bank of Japan's `tankan' survey showing drop in business confidence and Nikkei-22 5 shed 218 points to close at 12,751.

The BSE-30 shares sensitive index (Sensex) closed at 3,426.03, losing 30.75 points over previous close. At NSE, the S&P CNX Nifty closed at 1,098.60.

Removal of circuit breakers on individual stocks brought volatility, which in turn led to wild swings in the stock prices and the benchmark indices. Good sense prevailed over the Bombay Stock Exchange (BSE) administration as it decided to annul some trad es for ACC shares at a price of Re 1 per share. BSE sources said that a dealer at Angel Stockbroking punched wrong trade for 10 lakh ACC shares up to a price of Re 1 per share. Some trades below Rs 109 per shares have been annulled while the broker would have to suffer losses for sell trades at prices above Rs 109.

Volumes on the BSE cash market dropped to Rs 505.43 crore, nearly 10 per cent of what it was in March and nearly six per cent of Rs 7,831 crore when it peaked on September 13 last year. Volumes in 414 rolling stocks were Rs 391 crore and about Rs 114 cro re in weekly settlement segment.

The former Vice-President of BSE, Ms Deena Mehta, said that trading under the new system is not very encouraging going by the trading on the first day.

Futures market witnessed markedly reduced activity. In options, there was volume of only one contract on Sensex options July series.