MUMBAI:
 The carnage in the mid- and small-cap space is wreaking havoc on the bourses. In less than two months, some of the mid-cap stocks have lost as much as two-thirds of their value and now face the prospect of being treated as smallcaps. And some small-caps are now trading at single-digits , with the prospect of soon being relegated to a group which are often called penny stocks.

Consider this: Orient PaperBSE -9.64 % & Industries , which was at Rs 80 on February 1, closed the Friday session at Rs 7.5, a value erosion of nearly 91%. Core Education , which in over just three sessions about a month ago had lost about 80% of its value , is at Rs 49.5, down from Rs 315 on February 1.

In terms of shareholder value erosion , measured by fall in market capitalization , Orient Paper has lost about Rs 1,100 crore to Rs 154 crore , while Core Education has lost Rs 3,100 crore to Rs 567 crore .

Data analysed by TOI showed that in about 160 stocks from groups A and B on the BSE , shareholders have lost more than half their value since February 1. Of these, in 18 companies shareholders have lost over two-thirds of the value during the same period .

According to dealers , in most of these counters , financiers who had lent money to speculators to buy stocks on borrowed money against the same or some stocks being kept as collateral—called margin funding in market parlance-—sold these stocks as losses mounted and speculators failed to makegood such losses on their positions .

In some of these counters even shares pledged by promoters to lenders were sold by the latter as losses on promoters' holdings rose , dealers said . For example , in a disclosure to the stock exchanges on March 1, Core Education said that four entities who had shares pledged by the company's promoters together sold about 44 lakh shares , or about 3.8% of the company's tota shareholding , in the market "on account of margin shortfall" .

A recent note from domestic retail broking major K R Choksey Shares & Securities studied the reasons behind the recent carnage in the mid- and small-cap space.

Some of these were : lack of serious buying interest among investors , rampant trading by FIIs which is distorting valuations of a large number of stocks, low confidence among investors in the stock market as they prefer to invest in fixed income instruments where the surety of earning money is much higher , and selling of shares pledged by the promoters by NBFCs who funded those promoters in the first place and are now almost desperate to recover their dues.

NEW DELHI: After making a positive start, markets turned choppy on Friday, weighed down by losses in consumer durables, realty, IT and oil & gas stocks.

According to experts, the short and medium term bias remains negative and for the market to move higher, Nifty has to cross 5900 levels on a closing basis.

"Nifty is likely to seek support around 5620-5600 and on the other side, may face resistance around 5700-5740 for next session," SMC said in a note.

At 10:30 a.m., the Nifty was trading 0.20 per cent higher at 5,668.85. It touched a high of 5675.55 and a low of 5656.60 in early trade today.

The BSE Sensex pared some of its morning gains and was trading 0.1 per cent lower or 20 points at 18772.07. InfosysBSE -0.28 % (1.01 per cent), Bharti AirtelBSE -1.51 % (2.7 per cent) and ICICI BankBSE -0.63 % (0.64 per cent) led the gainers pack.

We have collated recommendation from various brokerage firms on stocks which could face further selling pressure:

HDIL: Sell with a target of Rs 45 and a stop loss of Rs 49

After hitting its 52 week high of Rs 123, the stock is continuously trading lower. It was trading in range of Rs 55-72 levels for past three weeks.

On Thursday, stock went down by over 2 per cent subsequently registered a fresh all time low with decent volume. We are anticipating that selling momentum can continue for coming days, which suggests the downside target of Rs 45-44 levels with a stop loss of Rs 49.

L&T Ltd: Sell with a target of Rs 1360 and a stop loss of Rs 1410

It is apparent from chart that the stock is going to complete the "Head and Shoulder" pattern on weekly charts which is bearish in nature.

The stock took around nine months for the pattern to form, so the potential of downside is quite strong. It has to complete the right shoulder of pattern which suggests the downside levels of Rs 1360-1340. Trader can consider 1410 as stop loss for next session.

Reliance Infrastructure: Sell with a target of Rs 320 and a stop loss of Rs 342

The stock is continuously trading lower after testing its recent high of Rs 565 levels. On Thursday, stock went down by over 6 per cent subsequently registered a fresh 52 week low with record volume which indicates that selling is more aggressive at current levels.

Therefore, investors can initiate short for the downside target of Rs 320-315 levels with stop loss of Rs 342.

NEW DELHI: India will add a significant part of the next 5 billion Internet users, with maths suggesting that it is the country to look out for, Google Executive Chairman Eric Schmidt said today.

"This place is going to be rocking," said Schmidt, who is in the national capital for the Google's Big Tent Forum.

"In the short term it is China, but math favours India. And I'm a mathematician," Schmidt said when asked by Guardian's Editor-in-Chief Alan Rusbridger on his choice on India and China.

Speaking at the question and answer session with Rusbridger, Schmidt expressed great hope for the growth of Internet and broadband users in the country.

He said: "(There are) roughly 600 million mobile phone users in India, there are about 130 million Internet users, (but) there are only about 20 million broadband users. So by any definition India is under-penetrated. And in our book... we talk a lot about the importance of the next 5 billion.

"There are only 2 billion people on Internet in the world today. And many of those 5 billion would be coming from India. So imagine a situation 5 to 10 years from now. When there is a billion people on the Internet. Will they be significantly different from the first 100 million users. I'm sure there will be many more languages and they won't be so English focused."

However, Schmidt added that to achieve this growth India needs to build out the infrastructure and to lower the cost of devices. "I think the sum of all that is that this place is going to be rocking."

On regulation in India, especially clauses pertaining to liability on the intermediaries, Schmidt said it is important for service providers to check offensive data on the Net.

"India is a country with very very strong element to free speech and public discussion, which is admirable with a strong and vibrant democracy with a strong legal system. There are some clarifications that you needed to some of the aspects of law (section 66) and intermediate liability," he said.

"The reason is that you want entrepreneur to be willing to take risks. If they do take a risk, yout don't want them to be going to jail, unless they are very evil. So for example when content is put up, it is offensive...it will take time to discover its offensive and take it off," Schmidt added.

The Google chief went on to say that "it will be people who will actually make lies, they will be dramatic, they will promote things, they will do things, which are inappropriate and which are covered by your laws. It is important that the intermediaries the telcos, the ISPs, the start-ups have an ability to take that information down".

However on the dark side of the Internet he said: "There are also negatives for example the loss of privacy, which is a very real concern. And also there is a possible misuse of this information by governments."

Giving examples of data misuse by governments, Schmidt said if it can happen in about half of the US and may be another half in Europe,"it can certainly happen here as well".

Headlines for the day

• 2G allocation case: Bharti, Essar to challenge court order
• Credit Suisse buys 1.56% stake in Emami for Rs 141 cr
• JSPL to buy majority stake in Apollo Minerals' iron ore assets
• RBI announces Rs10,000 cr OMO

Major headlines

RBI cuts Repo Rate by 25 bps; CRR unchanged Sun TV falls on political uncertainty

Indian indices The key indices opened higher today but kept swinging between gains and losses post RBI policy announcement. Heavy selling in index heavyweights and banking stocks dragged markets lower. Markets witnessed steep fall in late morning trades with the Sensex plunging below 19,000 amid political uncertainty after the DMK began withdrawing support to the ruling United Progressive Alliance. According to reports, five DMK ministers seem to have resigned. RBI's rate cut was also ignored as investors sentiments were dampened by domestic chaos. The broader markets too ended in red leading to weak market breadth. The BSE Midcap index declined 1.37%, while the BSE Smallcap index fell 1.57% in trade today. Major events: The Reserve Bank of India in its mid-quarter policy review (Jan-March) reduced Repo rate by 25 bps to 7.5%, in line with estimates. The RBI lowered the repo rate today for the second time this year in a bid to help revive growth in Asia's third-largest economy, but warned that the scope for further easing is limited. However, the other key rates - CRR and reverse repo rate remained unchanged. The DMK pulled out of the Congress-led UPA coalition on Tuesday in protest against the government's position on a U.S.-backed United Nations resolution on war crimes carried out during Sri Lanka's civil war.

NEW YORK: US stocks fell on Monday after a Cypriot plan to tax bank accounts as part of a larger scheme to avoid a bankruptcy triggered a selloff in European financial shares, and rekindled fears about an escalation in the euro-zone crisis.

The weekend announcement out of Cyprus came after the S&P 500 ended its 10th positive week in the last 11, and investors on Wall Street took the chance to cash in some of the recent gains. Including Monday's modest decline, the S&P 500 is on track to post its best quarter in a year.

Cypriot ministers were trying to revise a plan to seize money from bank deposits before a parliamentary vote on Tuesday that will secure the island's financial rescue or could lead to its default.

European officials have said the measure is a one-off for a country that accounts for just 0.2 percent of European output. The fear is that savers in larger European countries become nervous and start withdrawing funds, although there was no immediate sign of that on Monday.

"The issue ultimately for investors is: 'Is this going to cause contagion?'," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. She said European officials "have got to make clear this is Cyprus specific and contain the risk."

An index of bank shares across Europe fell 1.8 percent. Their U.S. peers followed suit, with the KBW bank index down 0.8 percent and the S&P financial sector index off 0.7 percent.

JPMorgan Chase fell 1.1 percent to $49.46 and ranked as one of the Dow's biggest percentage decliners.

The Dow Jones industrial average fell 14.04 points or 0.10 percent, to 14,500.07. The S&P 500 slipped 4.48 points or 0.29 percent, to 1,556.22. The Nasdaq Composite shed 4.06 points, or 0.12 percent, to 3,245.01.

Earlier, the Dow fell more than 100 points to reach an intraday low of 14,404.21. The S&P 500 hit an intraday low of 1,545.13, while the Nasdaq slid as low as 3,211.10.

The Dow is still up about 11 percent for the year and the S&P 500 is up about 9 percent so far in 2013.

"The market was slowing and getting a bit ahead of itself," Krosby said. "This is just part of that digestion and consolidation. You don't see any panic in the U.S. market."

The CBOE Volatility Index, or VIX, Wall Street's "fear gauge" rose 12.1 percent but was still below 13, indicating a lack of a shift in sentiment toward the stock market. U.S. Treasury debt prices rose, but yields were within last week's range.

Schlumberger shares fell 2.7 percent to $77.29 after the world's largest oilfield services company said fewer rigs than predicted were going back to work in its North American operations.

Shares of Dow component Boeing Co fell 1 percent to $85.60 and dragged on the Dow. To get its 787 Dreamliner flying again, Boeing is testing the plane's battery system to a standard that the company itself helped develop - but that it never used on the jet.

Boeing's European rival Airbus has signed an 18.4-billion-euro deal ($24 billion) with low-cost Indonesian carrier Lion Air for 234 single-aisle passenger planes, poaching one of Boeing's fastest-growing customers.

MUMBAI: To enable faster arbitration between market intermediaries, capital market regulator Sebi today announced an automated system for selection of arbitrators from a common pool.
The automatic process would be triggered in cases where the members and clients of stock exchanges fail to find an arbitrator, from a list compiled by the bourses, to resolve their disputes.
Presently, an arbitrator is selected by the bourses that help settle disputes between a client and broker, or disputes among brokers.
Amending the arbitration mechanism, the Securities and Exchange Board of India (Sebi) has introduced a system of 'Automatic Process' and 'Common Pool' for selection of arbitrators which would be effective from April 1.
As per the new norms, a list of arbitrators on the panel of stock exchanges having nation-wide trading terminals would be pooled and called 'Common Pool'. This list would be made available to public.
In a circular today, Sebi said that in the cases where the client and member ( stock broker, trading member or clearing member) fail to choose an arbitrator from the common pool, one would be chosen from the 'automatic process' wherein neither the parties to arbitration nor the concerned stock exchanges will be directly involved.
"The automatic process will entail a randomised, computer generated selection of arbitrator from the list of arbitrators in the common pool," Sebi said.
"The selection process shall be in chronological order of the receipt of arbitration reference that is only after selecting an arbitrator for the former arbitration reference received, selection for the latter shall be taken up," it added.
As per the regulator, the automatic process would send a system generated, real time alert such as an short message service (sms) and e-mail to all entities involved in the particular case.
Further, the communication for the appointment of the arbitrator would be sent immediately or latest by the next working day by the stock exchange on which the dispute had taken place.
As per the guidelines, an arbitrator would have to decline an arbitration reference in case there is a "probable conflict of interest".
"After the said arbitrator declines, the automatic process' will pick the name of another arbitrator.
"This would continue till the time there is no conflict of interest, by the selected arbitrator", the regulator said.
The time line for choosing the arbitrator could be extended from existing 30 days period, but in that case, stock exchanges " shall put on record the reasons of such extension", it added.
Further, in cases where conflict of interest is observed, the arbitrator has to send in the information for the same to the stock exchange within 15 days of receipt of communication.
Sebi said thay the fees of arbitrator "shall be dealt in line with existing provisions, by the stock exchange on which the dispute had taken place".