logo

Sebi shell firm order drags Sensex down 216 pts to 3-wk low

Sebi shell firm order drags Sensex down 216 pts to  3-wk low
It was the third straight session of loss for stocks on Wednesday as the Sensex took a hit of 216 points to close at a three-week low below the 32,000-mark on growing sense of disquiet following Sebi crackdown against suspected shell companies.

The regulator clamped down on 331 such firms on Monday, directing exchanges to take action against them.
Investors also ran for cover after a flare-up in tension between the US and North Korea over the latter's ballistic missile programme. They fear for the worse as both sides show no signs of backing down, according to traders.
Selling pressure built up following muted June quarter earnings by some companies, they added. It was so strong that all the sectoral indices, led by healthcare and auto, ended in the negative zone.
The Sensex recovered partially before settling down 216.35 points, or 0.68 per cent, at 31,797.84 -- its lowest closing since July 18. The gauge has now lost 527.57 points in three sessions. The NSE Nifty also remained under pressure and was down 70.50 points, or 0.71 per cent, to close at 9,908.05. Intra- day, it cracked below the 9,900-mark to touch 9,893.05.
"Global headwinds owing to geo-political tension between North Korea and the US provided more cues to the domestic market, which is already reeling under Sebi's regulatory pressure... Small- and mid-cap underperformed on Wednesday," said Vinod Nair, Head of Research, Geojit Financial Services. Overseas, Asian stocks ended lower and European shares dropped in early hours.
Foreign portfolio investors (FPIs) were net buyers of shares worth Rs 1,539.82 crore while domestic institutional investors (DIIs) bought shares worth Rs 798.55 crore on Tuesday, provisional data showed.
Amid heightened global uncertainties, the rupee on Wednesday retreated sharply by 21 paise to end at 63.84 against the American currency due to fresh demand for the greenback from importers and banks.
Simmering geopolitical tensions took centre-stage once again following hardening of stand by both the US and North Korea, dampening forex market sentiment.
A modest pick-up in the dollar demand, amid growing conviction that the Fed remains on track to raise interest rates further in 2017, largely put pressure on the local currency. Domestic bourses too found the going tough and posted the third straight session of losses. The domestic currency had recovered 17 paise on Tuesday. pti
JKumar, Parsvnath move SAT against 'shell company' tag
Mumbai: A number of companies, including JKumar Infraprojects and Parsvnath Developers, on Wednesday approached the Securities Appellate Tribunal against Sebi classifying them as "shell companies". Sebi defended the move even as several other firms are expected to take similar recourse and challenge the regulator's decision asking stock exchanges to restrict trading in 331 firms referred to it by the government for being "suspected shell companies".
These companies are seeking stay on trading restrictions. Sebi has asked the exchanges to restrict trading in shares of 331 such companies, some of which have investments by several well-known domestic and foreign investors. On Tuesday, many of the companies tagged annual reports and other financials along with their filings to press upon the exchanges that they are not shell companies and are in compliance with all regulations.
"We are shocked to find our company's name amongst the list of suspected shell companies as a result of which, our equity shares...are being shifted to GSM VI on the stock exchanges.
J Kumar Infraprojects on Tuesday said it is not a shell company and suspicion of the regulator is uncalled for.
"Our company's compliance track record both with the exchanges and Registrar of Companies have been impeccable. As a result, our company's securities may be traded only once in a month on a trade to trade basis and Sebi has envisaged a "financial audit" thereby implicitly castigating us and tarnishing our reputation," Parsvnath Developers had said on Tuesday.
Agencies

Agencies

Our contributor helps bringing the latest updates to you


Share it
Top