Mumbai/ New Delhi: After an unprecedented crash that wiped out about Rs 2,00,000 crore in capitalisation, the stock market today (May 17, 2004) recovered substantially by over 470 points within an hour of resumption of suspended trading, after Congress leader and possible Finance Minister Manmohan Singh warned of tough action against manipulators.

Concerned over the mayhem at the market which plunged by an unprecedented 786 points before trading was frozen twice for three hours, the first time in BSE history, Singh stepped in and promised pro-growth tax and FDI policies.

Recommencement of trading at 13:15 hours (IST) gave a soothing touch to investors as outgoing Finance Minister Jaswant Singh put the market on alert and activated regulator SEBI and Reserve Bank after Singh talked to him on phone.

The recovery in the market came with domestic financial institutions, mostly Government-owned, went on a buying spree to rebuild the confidence of investors, who were estimated to have lost about Rs two lakh crore before the freeze as market went into a tizzy on apprehensions over economic reforms, policies and disinvestment.

Expressing concern over decline in the stock market, Jaswant Singh said uncertainty and lack of confidence among the investors had caused the crash but hoped that market would stabilise in the next few hours.