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Friday: After the rise, Sensex plummets

Speculations about a promissory notes problem played havoc on the markets swinging the index by 366 pts.

india Updated: Apr 08, 2006 12:27 IST

Speculations about a promissory notes problem as also suspension of some foreign funds played havoc on the stock markets, whose benchmark index swung by a huge 366 points during the session that started with strong hopes of a liberal bonus from IT major Infosys.

A quick denial by the Securities and Exchange Board of India (SEBI) on the promissory note problem, however, had a soothing effect on the market, aiding the Bombay Stock Exchange Sensex to recover partially after mid-session.

This is the largest intra-day swing after May 18, 2004 when the market hovered in a range of 401.52 points. On May 17, 2004, the market had swung by a record 793 points during the session in reaction to uncertainty over economic reforms and delay in the finalisation of a Common Minimum Programme (CMP) by the Congress and its allies.

After flaring up to an all-time high of 11,930.66 in early trading on Friday, the Sensex later came under a heavy onslaught of selling and slid to the day's low of 11,564.99 as rumours regarding promissory notes and suspension of some Foreign Institutional Investors (FIIs) spread like wild fire in the market.

The Sensex later ended the day at 11,589.44 against Wednesday's close of 11,746.90, a net loss of 157.46 points or 1.34 per cent.

Investors credited the Sensex's initial flare up to near 12,000 mark to expectations of a liberal bonus from the IT major, prompted by the company's announcement that the board meeting to be held on April 14 will consider a bonus issue.