Markets recover but Surat still in shock | World scene

SHAKEN BY THE CRASH: Over Rs 1,000 crore have been put into the stock market by the diamond industry in the past year.

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Keywords: Diamond Industry, Surat

Surat: Even though the stock market has recovered, traders in Surat are still reeling under the crash. Several diamond and textile merchants like Ashok Mangani invested in the stock market a few months ago. But when the markets had a free fall in the last two days, he and several others could do little but watch in disbelief.

The panic was such that Mangani rushed to his bank to issue ‘stop payment’ instructions for the cheque he had issued for the Reliance Power IPO.

“I am so scared that I have issued stop payment instructions for the reliance Power IPO. I don't want to investment in the stock market anymore,” Mangani said.

Mangani is not the only one who hit the panic button. Hundreds of traders in the city had diverted huge funds into the stock market, only to find themselves staring at huge losses. It is almost a mini crisis for an economy, which is based on the diamond and textile industry.

Over Rs 1,000 crore have been put into the stock market by the diamond industry in the past year. Textile traders and businessmen have invested around Rs 400 crore while the construction industry has put in Rs 300 crore.

“A lot of cash at hand was the biggest strength of Surat's diamond industry, as it was easy to purchase rough diamonds. Now with a money crisis, the industry will suffer its effects for a while,” Joint Secretary of the Surat Diamond Association Rohit Mehta said.

The markets may have recovered now, but it will surely be a while before Surat's economy can get back on track.