The Finance Minister Mr. P. Chidambaram issued a statement and said that there is no plan to ban participatory notes issued by FIIs. The statement helped the Indian Stock Markets to recover from the biggest ever intra-day fall. The NSE Nifty was down by nearly 10 percent in early trades yesterday and the trading was halted due to sudden fall in markets. However, Finance Minister maintained that SEBI will take some measures regarding anonymous capital flowing in the country.

The recent rise of 2000 points for BSE Benchmark Sensex has left everyone amazed about the direction of markets. The last 1000 points rally of BSE was completed within just 4 trading sessions. There have been huge fund inflows from FIIs and their clients. Almost half (51.7%) of the FIIs inflow comes via participatory notes (P-Notes)

The statement issued by Stock Market Watchdog SEBI on Tuesday evening regarding proposed ban on P-Notes was a big shock for most FIIs. SEBI had proposed to end P-Notes and to not allow any fresh issue. The currently active P-Notes were to be ended within 18 months.

Finance Minister, Mr. P. Chidambaram said, “Investors through PNs are certainly welcome to invest in India, but for the present it is important to moderate these capital flows. If an investor through PN wishes to register as an FII and invest, he or she is most welcome. There is no need for alarm or panic statements. These are unfortunate.”

The BSE Sensex was down by 336 points and ended the day at 18715. While NSE Nifty was down by 108 points and ended the day at 5559.

The major losers in yesterday’s trade were Reliance Energy, ACC, SBI and BHEL. However Technology stocks ended their day higher. TCS, Satyam and Infosys closed with marginal gains.