MKT 'MAY'HEM: HEDGE FUNDS STILL SELLING

Continued selling by hedge funds has pulled down the Sensex by over 1,100 points so far.

With the Sensex falling over 10%, trading has been suspended and would resume at 1 pm. This is only the second time in the history of Indian markets that trading has been suspended during intra-day trades. The last time trading was suspended was on May 17, 2004.

Most Asian markets were down less than 2%. Unwinding of positions by traders, and selling by foreign funds in the absence of buying interest from domestic institutions has lead to a crash in stock prices.

 "Fund managers are worried that redemption pressure would set in anytime, and hence are holding on to their cash," Manish Kanchan, cheif executive officer of  Ambit Capital, said.