Webinfosys;s Local News : Sensex recovers; FM says no plan to ban P-notes

Minutes after the carnage at the bourses, Finance Minister P Chidambaram said on Wednesday that there was no plan to ban participatory notes (PNs), which are used by foreign institutional investors (FIIs) to represent overseas investors who are not registered with the Securities and Exchange Board of India (SEBI).

Chidambaram was speaking to reporters a day after the SEBI proposed in a paper that financial instruments such as PNs would be phased out over a period of time.

The 30-share index, which reached a life-time high this week, crashed after the SEBI put up its suggestion late on Tuesday evening.

The PNs are said be behind the hugh surge in foreign inflows, which caused the latest market rally. "The steps taken by SEBI are in the right direction," the minister said.

Meanwhile, Sensex and Nifty recovered marginally, after it crashed to an unprecedented low by 1743 points forcing the BSE to halt trading, after Finance Minister P Chidambaram's statement.

The BSE Sensex recovered nearly 1,000 points around noon after trading resumed following an hour long suspension. The National Stock Exchange's wide-based Nifty also recovered but was down 4.70 per cent at 5,401.45 points in the reopened session.

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