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Sensex wild after SEBI crackdown

SEBI, THE market regulator, turned market mover on Friday. Its crackdown on big guns involved in the IPO scam ? especially the ban on Indiabulls Securities and Karvy from the market ? sent the Sensex on a 491-point nosedive when trading opened. Within an hour, the mood on Dalal Street changed.

india Updated: Apr 29, 2006 15:30 IST

SEBI, THE market regulator, turned market mover on Friday. Its crackdown on big guns involved in the IPO scam — especially the ban on Indiabulls Securities and Karvy from the market — sent the Sensex on a 491-point nosedive when trading opened. Within an hour, the mood on Dalal Street changed.

SEBI clarified that the ban would be limited to transactions of operators and was not applicable to client accounts for 15 days. SEBI stayed its order barring Indiabulls, one of the biggest online traders on exchanges. The Sensex bounced back, wiping out initial losses and ending the day 17 points up at 11,851.93. SEBI's backtracking on Indiabulls had done the trick.

But collateral damage was felt elsewhere. Heads were rolling in banks and other entities named in the SEBI order. According to market sources, HDFC Bank sacked over 30 officers at the junior management level. There was no official word from the bank.

Others named are scurrying to SEBI to clarify their positions. Karvy group CMD C. Parthasarathy said they would seek a hearing either on Tuesday or Wednesday. The group was the worst affected. Anagram Securities would also approach SEBI. The market was salvaged by FIIs and mutual funds that made aggressive purchases in blue chip counters, particularly RIL, TCS, NTPC, HLL, Maruti Udyog, ICICI Bank and Bharti TeleVentures, which ended with handsome gains.

First Published: Apr 29, 2006 15:30 IST