India's Markets Will Be Among the First to Recover, Bhave Says
By Pratik Parija and Pooja Thakur
Nov. 22 (Bloomberg) -- India's markets will be among the first to recover from the stock rout caused by the financial crisis roiling the world's bourses, said C.B. Bhave, head of the nation's capital market regulator.
``This country will be among the first few that recover,'' said Bhave, chairman of the Securities & Exchange Board of India, at the Hindustan Times Leadership Summit in New Delhi today. ``When we do, our weight in the world will be more than what it was,'' putting more responsibility on India.
The benchmark Bombay Stock Exchange Sensitive Index, or Sensex, has dropped 56 percent this year as global financial companies' losses and writedowns from the collapse of the U.S. subprime-mortgage market neared $1 trillion, eventually toppling Lehman Brothers Holdings Inc.
Overseas funds have sold a record $13.3 billion in Indian equities this year as of Nov. 20, the regulator said, compared with a record purchase of $17.2 billion of equities in 2007.
The overseas investors exiting the market are those that are ``over-leveraged,'' Bhave said. Longer-term overseas investors are entering the Indian market, he said.
The regulator said there was no evidence so far of market- wide wrongdoing surrounding the decline in stocks.
India was caught by surprise when the global credit crisis led to a liquidity freeze in the country in September, Bhave said. It took 15 to 20 days for India to realize how closely it was connected to the credit markets.
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