The Hindu Business Line : SEBI on high alert; warns of stern steps

IN the backdrop of the Sensex nosedive on Friday, the Securities and Exchange Board of India (SEBI) has asked stock exchanges to remain ``extraordinarily watchful'' of any unusual movements in the market.

It has threatened to take stern action against any individual or entity found indulging in market misconduct and breaching rules.

In a communiqué issued here on Sunday, the SEBI said it continued to be on ``high alert'' and has asked the stock exchanges to report any unusual movements. It said it had called for data from the exchanges on Friday for analysis and examination.

In what has been reported as the biggest single-day fall in four years, the Sensex had taken a 330-point drubbing on Friday. On that day, SEBI held a special surveillance meeting to take stock of the market movements, particularly the sharp decline on the last trading day of the week.

SEBI officials said the meeting was routine and such stock-taking took place whenever the markets witnessed sharp movements.

Some market analysts attributed the Friday slide to statements from Left Front representatives who expressed reservations on the reforms process in its existing `avatar', including the disinvestment programme. These observations assume significance since the Left is likely to be a coalition partner of the Congress-led government at the Centre.

The perception that the Left Front may put the spanner in reforms process had caused stock markets to somersault. This resulted in the Communist Party of India (Marxist) ascribing the Friday-fall to the operations of a bear-cartel.

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