Crash Halts Indian Trading

Swift market drop shuts down stock exchange
By Jason Farago,  Newser Staff
Posted Oct 17, 2007 5:49 AM CDT
A stock broker reacts as the Sensex crashes, at the Bombay Stock Exchange building, in Mumbai, India, Wednesday, Oct 17, 2007. Trading at India's stock exchanges was halted after share prices plunged...   (Associated Press)
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(Newser) – Stocks in India took a spectacular dive today, forcing the suspension of trading only three minutes after the markets opened. The FT reports that a proposal by the stock exchange regulator to restrict the inflow of foreign capital through offshore derivatives triggered a massive sell-off. India's minister of finance called for calm after the Sensex lost 7.91% and the Nifty dropped 9.25%.

Markets pulled back from their losses once trading reopened, with both exchanges ending the day about 5% down. Some stocks, among them Reliance Energy, dropped by over 15%. But finance minister Palaniappan Chidambaram insisted that his government would implement the new regulations limiting the influx of foreign capital to prevent immoderate rises.