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.