Sensex loses 565 points
By Our Market Bureau | 18 May 2004
Mumbai: The BSE sensex lost a record 565 points yesterday and also registered a record intra day fall of 842 points which sent the markets in a tizzy. The BSE's index based circuit filters halted trading twice during the day, which reduced trading time by three hours. The consequent loss of market capitalisation in stocks was more than Rs 2 lakh crores.
The NSE's S&P CNX Nifty fell by 193.65 points to close at 1,388.75. The Sensex's biggest fall was on April 27, 1992 when the index fell by 570.42 points as the Harshad Mehta scam was exposed.
Apart from fears of a change in the privatisation policy, the chances of a US interest rate hike, rising oil prices and a slowdown in the Chinese economy played on investors' minds.
No sooner did trading begin, the Sensex crashed 550 points resulting in trading being halted for one hour both on the NSE and the BSE as the 10 per cent index-based circuit filter came into effect. It opened again at 11.15 a.m. but closed within two minutes after losing another five per cent, tripping the next filter.
The Securities and Exchange Board of India (SEBI) called an emergency meeting with stock exchange officials and later said that the exchanges had assured that there were no payment problems.
The Reserve Bank of India (RBI) said in a statement in the afternoon that it had set up a task force under an executive director to assist the stock market with liquidity and smoothen payment mechanisms.
Congress leader Manmohan Singh said in a statement that the new Government at the Centre would give all possible assistance for the stock market's development.