RIYADH, 23 May 2006 — Gulf-based non-resident Indians (NRIs) who have been dabbling in Indian shares were jolted out of their get-rich-quick dreams when Indian shares tumbled to an unprecedented level yesterday. The carnage in share prices took the Bombay Stock Exchange down 10 percent by early afternoon trading. Such was the panic that the 10-percent loss/gain rule was applied and trading was suspended for one hour.
Although, the market recovered from lower level after the trading was resumed, the fear of further shocks haunts the overseas investors who see the capital market as a place to multiply their money in the shortest possible time.
“I had no time to sell my investment as the stocks have been sliding for a week. I wonder whether I have lost my savings altogether”, says a Riyadh-based investor who does not want to be quoted by name.
Although the slide in general has been attributed to large-scale weaknesses seen in all bourses in Asia, investors in general remain concerned. US inflation worries continue to weigh on Asian market and bourses in Hong Kong, Japan, South Korea, Singapore and Taiwan remain affected.
Last week alone the market index in India slumped by 800 points in 48 hours and ended down by 1,347 points.
This slump has been as spectacular as its huge surge to set a new record of 12,000 on May 11. Within a week it has shed 1,500 points.
The foreign exchange reserves went up by more than a billion dollars last week, and the inflation in India is under control despite rise in global oil prices. The only remote possibility seems to be a possible scam or large scale manipulations by a few middlemen.
