Yesterday was the last mkt day for sales on the monthly settlement cycle where sales or purchases made must be settled by the last day of the month of February on the 28th hence the market started with many of the brokerages having selling side orders by clients who were debters of the broker credit schemes that was under pressure with many of the tight margins that had been created with the market loosing close to 2000 points from it’s peak in January. Ever since the unusual price increase of many stocks that were being speculated or pumped up with with huge broker credit and margins started to lose steam when some of the companies announcing results that proved the valuations were far beyond it’s intrinsic values.
Then came the reduction of credit offered by the brokerages that triggered a sell off by the investors who were not able to support the stocks they had invested on with cash and had to reduce exposure by 1st selling stocks that had profit and then getting forced out of the margins that seemed to go into overdrive since last week and getting blown out by yesterday’s deadline for month end. With the above situation simmering at the start of yesterday’s trading, the market reached its first circuit breaker 47 minutes into the session when the S&P SL 20 index dropped 5% on a turnover of 1.2 billion triggering a market halt of 30 minutes and a second halt was triggered in less than an hour from the 1st when the S&P lost further 2.5% . The market seemed to calm down and regain around half it’s losses by the end of trading with a better turnover of 4.5 billion with Expo BIL LOLC RCL LOFC HAYL contributing more than half of it.The market is expected to see a little calmness today and hopefully the HNI and Institutional investers will try to grab the bargains on offer which may help stabilize the volatility.
Already the foreign interest in a few selected stocks led by EXPO have seen continuous net buying within the last four market days
