The Telegraph
Since 1st March, 1999
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Snafu sends stocks swooning

Mumbai, Jan. 16: The aftershocks of a trading halt ricocheted on Dalal Street. The BSE sensex plunged below the 6000-mark in a session that had to be extended because of a technical snag in the futures section of the National Stock Exchange (NSE).

The lurking fear that FIIs have slowed purchases was compounded with what the NSE called the “software glitch”.

“Such technical snags happen only here,” rued an NSE broker. “A mechanism has to be found that allow uninterrupted trading when glitches take place,” he added.

NSE officials said the problem cut off several terminals from the main server. “We tried to rectify the situation immediately and extend trading. The Bombay Stock Exchange (BSE) stepped in too, and prolonged trading by 90 minutes to 4.45 pm,” an NSE official said. The source of the problem was yet to be fixed.

On Dalal Street, the sensex opened marginally higher at 6068.66, but dropped to the intra-day low of 5914.02 before ending at 5946.19 in a fall of 117.72 points, or 1.94 per cent. The broader National Stock Exchange (NSE) nifty shed 2.25 per cent to close at 1,900.65.

Adding to the bulls’ discomfiture is the noticeable trend that foreign investors are turning net sellers, booking part of their profits. The foreign institutional investor figures reveal that they have sold Rs 57.50 crore more than they bought yesterday.

Brokers were also concerned by a report in a financial daily on the ban on investments by overseas corporate bodies routed through participatory notes, an instrument that allows the actual investor’s identity being kept anonymous.

The index has dropped nearly 4 per cent in the past two days, the highest in recent months.

Many attribute the NSE technical snag as the prime motivator for the current loss. As broker terminals got disconnected from the main NSE server, people feared a crisis. At the end of Thursday, the exposure in the segment had totalled Rs 13,300 crore.

Gold plunges

Gold prices nose-dived across the country today on panic selling by stockists, triggered by a fall in overseas markets and recorded losses between Rs 100 and Rs 180 per 10 gram. In Chennai, the yellow metal plunged by Rs 180 at Rs 6,135 per 10 gram followed by Calcutta with a loss of Rs 155 at Rs 6,220. In Delhi, gold dropped by Rs 120 at Rs 6,120, while in Mumbai, it recorded a loss of Rs 100 at Rs 6,110.

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