Trade Halted 1 Hour Due to Steep Declines India's Main Stock Indices Fall

MUMBAI, India (AP) -- Indian shares fell sharply for a second day Tuesday amid worries about a U.S. recession and global slowdown, but trimmed some losses after an initial plunge.

The benchmark Sensex index plummeted about 10 percent at the open, triggering trading halt for about an hour. Subsequent trading was volatile, with index falling as much as 13 percent to as little as 3 percent

By the close, the Sensex fell 875 points, or 4.97 percent, to 16,729.94. On the rival National Stock Exchange, the 50-share S&P Nifty index fell 309 points, or 5.9 percent, to 4,899.30.

Finance Minister P. Chidambaram urged investors to remain calm, telling reporters "there is no reason at all to allow the worries of the Western world to overwhelm us."

He said he has assurances from the central bank and other banks "that enough liquidity will be provided to brokers and market players."

The declines came after Sensex plummeted 7.4 percent Monday, its second-biggest percentage loss ever. Since the start of the year, the index has fallen more than 17 percent.

India's markets have dropped the past seven sessions on spreading fears that the U.S. economy, a key market for Indian exports and outsourcing contracts, will contract this year.

Many analysts were pessimistic Tuesday, saying they expected more losses in coming days.

"Nobody expected this," said Rajeev Sampat, an investment analyst in Mumbai.

"The pace of the fall shocked people, nobody expected it to fall so much, so fast," he said. "In terms of recovery, we still have some way to catch up with global markets -- Japan and Hong Kong were down sharply. Even if there is a recovery it will be short-lived."

There was confusion about how far the Sensex had dropped before it was automatically shut down after first opening Tuesday.

Some brokers said their trading screens showed a drop of 9.75 percent before the shut down, a move that's supposed to be triggered only at 10 percent. The BSE's Web site showed a drop of 11.5 percent.

The S&P Nifty dropped 630 points, or 12 percent, to 4,578 points on the National Stock Exchange before trading was shut down for about an hour.

At the end of the day, the Oil and Natural Gas Corp. was the biggest loser, tumbling 13.6 percent to 962 rupees. Other major losers included tobacco and hotel conglomerate ITC Ltd., down 9.5 percent to 184 rupees; aluminum company Hindalco Industries Ltd., off 9.4 percent at 150 rupees, and automobile firm Mahindra & Mahindra Ltd., down 9.1 percent at 611 rupees.