SEBI proposals send Sensex reeling

MUMBAI, APRIL 27. The market regulator's proposal to ban deferral products and pave the way for introduction of individual stock options and futures took broking fraternity by surprise and sent the Sensex reeling down reflecting a free fall in stocks on the Bombay Stock Exchange today.

As the BSE barometer opened with a wide downside gap of 168 points at 3389.22, the market resounded with screams of sale orders from speculators who made frantic attempts to get rid of their outstanding positions on the last day of the current settlement in a quick reaction to the proposed ban on carry forward trading.

The Sensex later dipped to a low of 3357.83, just to recover marginally to close at 3422.76 against 3557.19, still down by a whopping 134.43 points or 3.78 per cent. The BSE-100 index nosedived by 81.57 points to 1624.76 from 1706.33.

Operators also were panicky as the book closure in Reliance Industries, Reliance Petroleum, Infosys Technologies, Glaxo, Burroughs Wellcome and a few others, forced them either to square up positions or to take deliveries of these counters which enter into no-delivery period from Monday.

While foreign institutional investors were silent spectators to the fresh stocks upheaval and another reminder of `black Friday', domestic institutions and mutual funds which reportedly had booked profits in the earlier two sessions, made a feeble attempt to salvage the situation by picking up old economy stocks at lower levels.

The Securities and Exchange Board of India group on rolling settlement yesterday recommended a ban on all carry forward products with effect from July 2 when rolling settlement will be introduced in all specified stocks.

The broking fraternity which has been displeased with the decision to introduce rolling settlement in all specified stocks from July 2, were highly critical of the proposal. Brokers said the SEBI's decision was disastrous and would kill the market as the volume would drastically decline and the indices would turn volatile.

In the specified group, only 13 scrips including six index counters registered moderate gains on buying by Indian financial institutions.

Among the 162 losers, Himachal Futuristic, Global Telesystems, Zee Telefilms, DSQ Software, PSI Data, TV-18 and Aptech were locked in the 16 per cent lower circuit filter at close.

The BSE-200 and the Dollex were quoted down at 352.95 and 125.40 against 370.74 and 131.72 respectively. The BSE-500 dropped by 51.76 points to 1039.81 from 1091.42.

The volume of business was low at Rs. 1,173.32 crores against Rs. 1,490.13 crores. Infosys recorded the highest turnover of Rs. 113.54 crores followed by Satyam Computer (Rs. 104.07 crores), RIL (Rs. 76.59 crores), Wipro (Rs. 73.25 crores) and Digital Equipment (Rs. 57.36 crores).

- PTI

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