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Chronology of Indian stock market crisis

Indian stock markets are reeling from a series of insider trading scandals and settlement payment problems that amount to the worst crisis faced by market in nearly a decade.

The Securities and Exchange Board of India (Sebi) has launched a wave of investigations in an attempt to identify and punish manipulators. It has also taken steps to stem volatility by raising margin requirements and imposing tougher restrictions on carryforward trading.

The following is the sequence of events from after the Union Budget was presented on February 28:

• March 22: The Business Standard reports that Sebi may dismiss the board of the payment-crisis prone Calcutta Stock Exchange and crack down on unofficial carryforward trading to prevent future crises.
• March 20: Calcutta Stock Exchange launches proceedings against three brokers who have defaulted on settlement payments.
• March 20: Sebi says investigating alleged price manipulation of Amara Raja Batteries stock since November.
• March 17: Sebi says to extend rolling settlement to shares in the Bombay Stock Exchange's top 200 list and those eligible under various carryforward mechanisms.
• March 15: Sebi bans trading by stock exchange presidents, vice-presidents and treasurers.
• March15: Sebi says has prima facie evidence against 20 firms involved in bringing the market down after the budget and also found traces of price manipulation in UTI Bank and Global Trust Bank shares prior to merger announcement.
• March 14: Bombay Stock Exchange benchmark index ends more than five percent higher on bargain-hunting after dropping more than 19 per cent in previous two weeks.
• March 14: Unit Trust of India selects new valuer for second valuation of its merger with Global Trust Bank, reportedly under pressure from central bank after media allegations of insider trading ahead of merger announcement.
• March 13: Finance Minister Yashwant Sinha proposes to corporatise stock exchanges, so that ownership, management and trading membership are segregated from each other. Proposes to introduce rolling settlements in 200 shares including all the A group shares by July 2001.
• March 13: BSE Sensex closes down 6.03 per cent at 3,540.65 points -- its lowest close since May 4, 1999.
• March 12: Sebi suspends all broker member directors of BSE governing board.
• March 12: BSE Sensex ends 2.94 per cent down at a four-month low of 3,767.89.
• March 11: Sebi raises additional deposit margin on net outstanding sales of all shares to 25 per cent from 10 per cent to reduce volatility on bourses.
• March 10: Calcutta Stock Exchange says payments problem resolved as brokers make available funds to cover shortfall of about Rs 900 million.
• March 9: BSE Sensex closes over 4 per cent down amid worries of the effect of spillover of Calcutta Stock Exchange payments crisis.
• March 8: BSE president Anand Rathi resigns after allegations of misuse of privileged information to
• bring down the stockmarkets after a post-budget rally. He denied any wrongdoing.
• March 8: Vice-president Deena Mehta takes charge as acting president, becoming the first woman to head the 125-year-old exchange.
• March 8: The Reserve Bank of India asks some banks for data related to their capital market exposure, amid media reports that a private sector bank had exceeded prudential norms and could have contributed to recent stock market volatility.
• March 7: Sebi imposes restrictions on short sales to curb excessive volatility in the stock market. Sales of shares have to be followed by deliveries.
• March 5: Sebi imposes additional 10 per cent deposit margins on net sales outstandings and lowers the threshold for application of the additional volatility margins to 60 per cent from 80 per cent.
• March 4: Sebi says will launch a probe into stock market volatility and inspect the books of several brokers who allegedly played a role in the markets downfall.
• March 2: BSE Sensex falls 4.13 per cent after a fresh batch of warnings from US technology companies rocks the Indian software sector.
• March 1: BSE Sensex rises to 4,386.98 before it begins to retreat.
• February 28: Bombay index surges 4.36 per cent after Finance Minister Yashwant Sinha unveils a Union budget, seen as market-friendly and reformist.

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