India at 75: 16 events that impacted Indian markets between 2003 and 2014

From the shift of Sensex to a free-float methodology to the great fall after global financial crisis of 2008-09, and recovery afterwards, here are 16 biggest events for stock markets from 2003 to 2014

1. February 1, 2003: UTI Mutual Fund is carved out of the erstwhile UTI as a Sebi-registered mutual fund. The Unit Trust of India Act, 1963, is repealed, and UTI is split into Specified Undertaking of Unit Trust of India (Suuti) and UTI Mutual Fund. UTI Mutual Fund is promoted by State Bank of India, LIC, Punjab National Bank and Bank of Baroda, with a combined holding of 45.2 per cent in the paid-up capital of UTI AMC.

2. April 1, 2003: A year after the trading settlement or settlement of funds and securities within a specified period was reduced to three days, it is further reduced to two days.

 

3. September 1, 2003: The S&P BSE SENSEX shifts to the free-float methodology. In line with the free-float market capitalisation followed by major global indices, the BSE also shifts its key benchmark to this methodology. Under this, the proportion of shares readily available for trading is considered rather than full market capitalisation, in which promoter holding is also included.

4. May 17, 2004: The BSE Sensex falls 15.52 per cent — its largest fall in history (in percentage terms). It is triggered by the unexpected defeat of the BJP-led National Democratic Alliance in the Lok Sabha elections and the meltdown of stock markets in emerging-market economies.

Also read: India at 75: 20 milestones for Indian markets between 1995 and 2002

5. June 2, 2004: The Sensex closes over the 6,000 level for the first time. The milestone is reached on the back of good economic growth, improvement in relations with Pakistan, a surge in steel prices, the government’s plan to divest its stake in oil marketing companies, and a slew of good corporate performances.

6. June 13, 2005: Futures & Options contracts on the NSE’s Nifty Bank index are launched. The index, launched in April 1996, is among the most traded indices in the F&O segment after the Nifty50. The contracts, which would help address the needs of investors in hedging their exposure to bank stocks, are based on the CNX Bank index, a 12-stock index owned and managed by India Index Services & Products.

7. 2005-2007: The Sensex rallies from 6,000 to over 20,000 in December 2007. While the benchmark had taken over two decades to cross the 10,000 mark in February 2006, it doubled in just 20 months. The 2005-07 period also saw the Sensex crashing multiple times, with the sharpest falls coming in 2007 due to the RBI’s rate hikes and weak trends in global markets, besides other things.

8. May 28, 2007: In a first, India’s market capitalisation touches $1 trillion (at Rs 40.5 to a dollar, the rupee value is Rs 40.52 trillion). The milestone comes close on the heels of India’s GDP topping the $1-trillion mark.

Also read: India at 75: 18 biggest moments for Indian markets from 1947 to 1993

9. January 10, 2008: The Sensex hits 21,207 (an all-time high at the time), before the unfolding of the Global Financial Crisis (GFC) that originates in the US. The crisis leads to a sharp crash in markets globally. India, too, isn’t spared. The Sensex plunges 63 per cent in 2008 to under 7,700. Several stocks fall more than 80 per cent. Many are yet to recover. The 2008 sell-off has a damaging impact on investor sentiment. The level hit on January 10, 2008, is only scaled back in 2013.

10. January 15-18, 2008: Anil Ambani-led Reliance Power launches an Rs 11,563-crore IPO — India’s biggest at the time — amid a Bull market frenzy. The IPO receives nearly 4.8 million applications but bombs on listing as investor sentiment takes a turn for the worse due to the GFC crisis.

11. January 21, 2008: The Sensex plummets 1,408 points, or 7.4 per cent, to 17,605. And Nifty falls nearly 500 points, or 8.7 per cent, resulting in one of the greatest losses in investor wealth. The BSE temporarily puts a pause on trading at 2:30 pm owing to a technical issue, despite the fact that its circuit filter allows for up to 15 per cent fluctuations before suspending trade for an hour. The fall is dubbed “Black Monday”.

Also read: India at 75: 12 landmarks for Indian markets between 2015 and 2020

12. January 4, 2010: Market opening time changed to 9 am from 9.55 am; closing time unchanged at 3.30 pm. To iron out the volatility on market opening, stock exchanges launch a pre-open session, which comprises an order collection and matching session to arrive at so-called equilibrium price before the market opens for normal trading.

13. October 19-21, 2010: State-owned Coal India launches its Rs 15,200-crore IPO, which his bigger that Reliance Power’s in issue size. The issue garners good subscription and does well on listing, boosting small investor sentiment. Coal India would retain the biggest Indian IPO tag for over a decade.

14. June 11, 2011: Standard Chartered Bank lists as India’s first IDR (Indian Depository Receipt). Many Indian companies have listed in the US through the American Depository Receipt (ADR) route. But this marks the first time that a globally listed firm chooses to list in India. StanC’s IDR is seen as a landmark event for the Indian market. However, no other company lists through the IDR route because of regulatory hurdles. StanC would also delist its IDR in 2020.

Also read: India at 75: 9 most important events for Indian market since 2021

15. July 31, 2013: The National Spot Exchange Limited (NSEL), a firm associated with Jignesh Shah, suspends trading, leading to a Rs 5,600-crore payment crisis. Around 13,000 investors are said to be affected. Action follows, with government agencies seizing assets and brokerages and exchange officials trading charges. In the aftermath of the scam. the government would merge the commodities regulator (Forward Markets Commission, or FMC) with Sebi in 2015.

16. May 20, 2014: The Sensex jumps 3.75 per cent or 1,422 points in the first market session after exit polls show a clear majority for the Narendra Modi-led BJP. Investors rejoice that a majority government at the Centre would be able to shrug off the policy inertia seen during the previous coalition government.

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Contributed by Samie Modak, Krishna Kant, Ram Prasad Sahu and Sundar Sethuraman