MUMBAI, APR 25: With bear operators pulling down the market for eight days in a row, market regulator Securities and Exchange Board of India (SEBI) has decided to intervene by imposing an additional five per cent margin on the daily net sale position across stocks. The benchmark BSE Sensex which crashed by 227 points in the opening session on Tuesday later recovered to close with a gain of 23 points. Thanks to the Sebi measure and aggressive fund buying in the closing session, Sensex rebounded six per cent from its day's low of 4,284.17 - the lowest since November 2 - and closed at 4533.99 with a net gain of 22.94 points compared to yesterday's close of 4511.05. The BSE-100 Index, however, fell by 24.56 points to 2400.99 from the previous close of 2425.55. The broader 50-share National Stock Exchange Nifty index ended 1.43 per cent, or 19.90 points, lower at 1,368.10. Concerned over the sustained fall in share prices, SEBI decided to stem the fall by putting restrictions on short-selling (selling without delivery) by bear operators. ``The prevailing market condition was reviewed by SEBI with major stock exchanges today and it has been decided to put additional margins for scrip-wise net sale position at the end of the day,'' said a Sebi official. The 30-share BSE Sensex had fallen nearly five per cent in morning deals, the market's eighth successive downward move. It has lost 30 per cent, or over 1,800 points, from an all-time high of 6,150.69 in mid-February. There had been only sellers in the market particularly in the new economy stocks with investors running for cover amid global concerns over tech stock valuations. However, large fund buying at lower levels triggered speculative interest and technology stocks rose from the day's maximum permissible lows. Among the leading tech stocks, Infosys Technologies closed at Rs 7,295.50 up 9 per cent from its intra-day low of Rs 6,690, Zee Telefilms rose 17 per cent from its intra-day and six month's low of Rs 610.10 and closed at Rs 716.15. Preliminary data showed 996 issues declined, 296 advanced while 88 were unchanged. Reliance also ended strong on sustained buying by foreign funds. Speculators, which wanted to square up positions on the last day of current settlement on the NS, turned panicky initially and pressed sales in other counters too. As a result, Sensex opened sharply down at 4336.64 and later crashed to the day's low of 4284.17. Leading the losers on Tuesday were infotech shares again whose prices have lost over 60-70 per cent in recent months. Taking advantage of the situation with prices at its low levels, foreign institutional investors (FIIs) and financial institutions later entered in a big way and reportedly made heavy purchases in Satyam Computer, Infosys, RIL, NIIT, Zee Telefilms and others. The market has been suffering from its own crisis of confidence, ignoring even the intermittent sharp rallies on the Nasdaq exchange, analysts said.This is despite there being no major change in the country's economic fundamentals and excellent quarterly earnings numbers especially from information technology companies. But the introspection on tech stock valuations in global markets and the consequent unwinding of positions has unnerved local investors as most of their portfolios were heavily laden with tech stocks. The speculator push and fears of redemption pressures on local funds had dimmed the effect of even the $444.7 million worth of net purchases foreign funds made from April 3-20. Sentiment continues to take a hit as and when the technology-rich Nasdaq exchange heads lower. The market has for now lost its charm with retail investors and they are likely to stay away till the market heads higher for several days in a row, dealers said.
