Wednesday, October 17, 2007
India Stock Market Update 17 Oct 2007
SEBI had yesterday invited public comments on its proposal to restrict with immediate effect, issuance of PNs in derivative markets by FIIs and their agents. As per the proposals, FIIs and their sub-accounts are required to wind up the current ODI position over 18 months, during which SEBI will review the position from time to time.
Even though this was a proposal and is due for a vote on the 25th of October, it seemed to be that a lot of institutions and foreign funds saw this as a very abrupt move and voted with their feet. The proposal is seen as a move towards cleaning up the funds flow into the country and ensuring that dirty money is reduced. However, as always SEBI likes to release things without notice and that disrupts the whole system. It required an intervention by the Finance Minister to cool the market, and it recovered from 1700 point down to around 340 points down.
A lot of stocks that were fundamentally good, and yet don't have much FII interests did not fall much. Some of the stocks that did well on this day were:
1. Walchandnagar - Rs. 6300 (has gone up massively recently, so approach with caution)
2. Hindustan Construction - Rs. 176
3. Adhunik Metaliks - Rs. 114
4. Grauer & Weil - Rs. 196
5. KLG Systel - Rs. 673
6. Supreme Industries - Rs. 170
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