After a free fall of over 1,700 points, the stock market barometer Sensex staged a smart recovery after resumption of trade and was hovering just 211 points lower from the previous close at midsession on Wednesday.
The index recovered about 1,533 of the 1,754 points it tanked in the morning and was trading at 18,841.29 at 1330 hrs.
The losses were cut thanks to comforting statement from Finance Minister P Chidambaram that the government was not against Participatory Notes (PNs) - moves to curb whose issuance triggered the fall in the first place.
Market regulator SEBI Tuesday brought out a discussion paper inviting comments from the public by October 20 on its proposal to curb issuance of Offshore Derivative Instruments such as PNs by Foreign Institutional Investors.
The fall within minutes of opening of trading prompted the Bombay Stock Exchange to suspend trading for an hour.
