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Indian police on suicide watch after stocks slide

Policemen in the western city of Ahmedabad were keeping watch near lakes and canals to dissuade people in distress from trying to kill themselves and rescue teams were on alert.

“A financial crisis can trigger suicides. We are just trying to prevent them. Till now, no such cases have been reported,” said R.K. Patel, a police official in Ahmedabad.

The Bombay Stock Exchange had a market value of $657 billion last week after falling 10 percent on Thursday and Friday. That dropped to $624 billion on Monday as the main index plunged another 10 percent before pulling back to end 4 percent down.

The meltdown left brokers and retail investors badly shaken and put policemen in at least two trading cities on alert against suicide by those facing severe losses.

Ahmedabad, capital of the western state of Gujarat, is considered particularly vulnerable to stock market volatility. It is one of India’s main trading hubs with some five million retail investors.

“I borrowed money to trade in the market. I lost it all in the past two days,” said 37-year-old Sanjay Joshi, a small investor. “I don’t know how will I repay my loans.”

Groups of brokers and investors burned a straw effigy of Finance Minister Palaniappam Chidambaram at Ahmedabad’s stock exchange, holding him responsible for the market slide after months of a spectacular bull run.

Lost fortunes

In the 1990s, a stock market meltdown led to several bankrupt brokers and small investors committing suicide across India. Some of the deaths happened in the eastern commercial hub of Kolkata, formerly known as Calcutta, and police deputy commissioner Gyanwant Singh told Reuters they did not want a repeat.

“We are watching people at the stock exchange. We are on an alert against possible suicides,” he said.

For some, whole fortunes were lost in just two hours of trade. “Gold has turned into brass. We are finished,” said S.S. Gupta, a middle-aged Mumbai broker.

Analysts described the slide -- as much as 22 percent from an all-time high of 12,671.11 points on May 11 -- as a correction and said order should return soon.

“It seems overdone and the market should stabilise during the second half of this week,” said Rajat Jain, Chief Investment Officer, Principal Asset Management Company Pvt Ltd.

Small investors have jumped onto the bandwagon in the past 12 months to benefit from a soaring stock market in one of Asia’s fastest growing economies.

But Monday’s fall shook their faith in the economic outlook.

“I am feeling cheated,” said Rakesh Shah, a 31-year-old retail investor who lost up to 500,000 rupees ($11,000).

“My investments were based on statements of the wellness of Indian economy. With such a huge crash what is the future of the economy, where has the faith in Indian markets gone?

Opposition politicians blamed “manipulators” and demanded Chidambaram resign.

“The stock market is in the hands of manipulators. We had never seen such a fall,” said Yashwant Sinha, former Finance Minister and a main opposition Bharatiya Janata Party lawmaker.

Chidambaram, however, tried to reassure investors. “The growth story I am confident will continue this year too,” he said.