The Hindu Business Line : `Upheaval in stock market unlikely'

THE Finance Minister, Mr P. Chidambaram, has ruled out any sudden upheaval in the capital market. Replying to a question in the Lok Sabha, the Finance Minister said that there was no ``tsunami on the horizon'' in the capital market.

He said that the capital market regulator, the Securities and Exchange Board of India, was more alert and effective than ever in the past.

On the issue of fluctuation of stock prices in May 2004, when the UPA Government had taken over, Mr Chidambaram admitted that irregularities were noticed by SEBI. "On the fall (in share prices) observed in May 2004, SEBI, during its course of investigation, has observed certain irregularities and appropriate proceedings have been initiated against the entities who have been prima facie found to have violated the provision of SEBI Act, 1002 and SEBI regulations," Mr Chidambaram has said in his written reply. He has said that notices have so far been issued to 12 entities in this regard.

The stock market had seen heavy selling between May 14 and 17, 2004. On May 14, the Sensex fell by 329.6 points (6.1 per cent) to close at 5069.87, while the Nifty fell by 135.1 points (7.87 per cent) to close at 1582.4. On May 17, the Sensex fell by 564.71 points (11.14 per cent) and closed at 4505.16, while the Nifty fell by 193.65 points (12.24 per cent) and closed at 1388.75.

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