Shares on India's stock market fell sharply today afters regulator barred several individuals and banks from trading over alleged market irregularities.
The Bombay stock exchange fell nearly 4 per cent in the first minute of trading, before recovering some losses.
The fall came after the Securities and Exchange Board of India (SEBI) issued notice to several individuals and companies late yesterday to stop trading for allegedly opening false accounts to corner shares in more than 100 IPOs.
As markets opened this morning, the benchmark Sensex of the Bombay Stock Exchange Sensex fell nearly 500 points to a low of 11,344 only to recover minutes later to 11,755.47 points.
The 252-page interim order issued by SEBI is the result of an investigation into some 105 IPOs from 2003 to 2005 and has been issued against 24 operators including individuals, small and large brokerages; 85 financiers; and 12 depository participants, including some banks.
It is unclear when the final order will be issued and the individuals and firms have 15 days to file objections.
The Sensex has risen nearly 28 per cent so far this year after having gained 42 per cent in 2005, buoyed by foreign investors pumping money into India's economic growth story.
According to official estimates, the Indian economy is expected to grow between 7.5 per cent and 8 per cent in the year to March 3st1, 2007, making it among the fastest growing economies in the world.