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| Version 3 | Version 4 |
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| Indian share market sees 9% slump | Indian share market sees 9% slump |
| (about 4 hours later) | |
| Trading on India's main stock index, the Sensex, was suspended briefly on Wednesday after the market slumped 9%. | |
| The fall came after the stock market regulator proposed urgent curbs on the flow of foreign funds into shares, in order to stop the market overheating. | The fall came after the stock market regulator proposed urgent curbs on the flow of foreign funds into shares, in order to stop the market overheating. |
| The Sensex sank to 17,544.15, after Tuesday's record high of 19,174.45, but clawed back many of the losses to close 1.8% down at 18,715.82. | |
| India's finance minister said that there was no need for alarm. | India's finance minister said that there was no need for alarm. |
| 'Abundant investment' | 'Abundant investment' |
| The regulator's recommendation relates to participatory notes - a form of investment used by hedge funds and other foreign investors who are not registered in India. | The regulator's recommendation relates to participatory notes - a form of investment used by hedge funds and other foreign investors who are not registered in India. |
| Investor sentiment is likely to weaken considerably as an important source of potential inflows has likely been plugged Rajeev Malik, JP Morgan | Investor sentiment is likely to weaken considerably as an important source of potential inflows has likely been plugged Rajeev Malik, JP Morgan |
| Analysts say the proposal may be aimed at countering a surge in foreign money that has caused Indian share prices to rise sharply - worrying some policy makers about its potential impact on the broader economy. | Analysts say the proposal may be aimed at countering a surge in foreign money that has caused Indian share prices to rise sharply - worrying some policy makers about its potential impact on the broader economy. |
| There is also a concern that because much of the investment is coming from unregistered firms, those investors could easily pull out, damaging the markets. | There is also a concern that because much of the investment is coming from unregistered firms, those investors could easily pull out, damaging the markets. |
| Finance minister P Chidambaram said that foreign investment was still welcome and that a ban on the notes was not intended. | Finance minister P Chidambaram said that foreign investment was still welcome and that a ban on the notes was not intended. |
| "But presently it is important to moderate capital flows, which are getting very copious and abundant," he said. | "But presently it is important to moderate capital flows, which are getting very copious and abundant," he said. |
| Analysts at JP Morgan suggested that of the $17bn of foreign funds invested in India so far this year, about $10bn has been in participatory notes. | Analysts at JP Morgan suggested that of the $17bn of foreign funds invested in India so far this year, about $10bn has been in participatory notes. |
| "Investor sentiment is likely to weaken considerably as an important source of potential inflows has likely been plugged," said Rajeev Malik, an economist at the firm. | "Investor sentiment is likely to weaken considerably as an important source of potential inflows has likely been plugged," said Rajeev Malik, an economist at the firm. |
| And Shitin Desai of DSP Merrill Lynch said that the market was reacting nervously to a proposed regulatory move. | And Shitin Desai of DSP Merrill Lynch said that the market was reacting nervously to a proposed regulatory move. |
| "This is the first step towards tighter norms for overseas funds, which is healthy." | "This is the first step towards tighter norms for overseas funds, which is healthy." |
| India is seen by many investors as one of the safest havens among the emerging markets as investors try to tap into one of the world's best-performing economies. | India is seen by many investors as one of the safest havens among the emerging markets as investors try to tap into one of the world's best-performing economies. |
| The rupee has risen more than 11% against the US dollar since the start of the year. It stood at 39.31 to the dollar at Tuesday's close, but had weakened to 39.90 early on Wednesday. | The rupee has risen more than 11% against the US dollar since the start of the year. It stood at 39.31 to the dollar at Tuesday's close, but had weakened to 39.90 early on Wednesday. |