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|May 14, 1998||
SEBI sends red alert to all exchanges
The Securities and Exchange Board of India today sent a red alert to all the stock exchanges in the country to keep a close watch on the movement of share prices in the wake of the developments following the nuclear tests by India.
Expressing his confidence over the market sentiment, SEBI Chairman D R Mehta told the media that he held a meeting today with the stock exchanges of Bombay, Delhi and the National Stock Exchange and asked them to ensure healthy and safe trading in the market.
The BSE sensitive index, which gained about 116 points today after falling sharply by 162 points yesterday over the economic sanctions announced by the US government against India, did not reflect the panic situation in the market.
Indicating the healthy trend in the market, Mehta said the total margins collected by the five stock exchanges --- BSE, NSE, DSE, Ahmedabad and Calcutta--- was around Rs 8 billion yesterday when the exchanges witnessed heavy selling pressure from the foreign institutional investors. The exchanges had also reviewed the position of brokers who had made losses of Rs 1 million or more and were satisfied that the losses were adequately covered by the margins.
Mehta said he had received mixed response from various foreign participants in the Indian market. While some FIIs and foreign custodians have expressed fear over slowdown of inflow of foreign funds into India following the US sanctions, a majority of the FIIs said that there was no change in their outlook towards India as the markets were very good for investment purpose.
A majority of custodians said they were still watching the events and were in the process of seeking legal advice following the sanctions.
Though the FIIs were net sellers in the last few days, their penetration was not powerful, he said.
The general impression of the exchanges was that the markets were safe despite volatility. The stock exchanges felt the markets seem to have now absorbed the impact of the news and its effect and have started improving on larger volumes.
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