The Securities and Exchange Board of India on Thursday warned market operators against "floating rumours" which has led to high volatility in the stocks market and said it will not hesitate to take stringent action against those found indulging in such acts.

The investors should not be misled by such rumours, Sebi said in a release in Mumbai.

"During last few days, the stock market has witnessed high volatility and it is gathered that baseless rumours were being floated in the market," Sebi added.

The market regulator warned that any person or entity found to be spreading such rumours would be severely dealt with.

The market during the past three days has been witnessing upheavals and Sensex going down by more than 400 points.

Meanwhile, the Bombay Stock Exchange cautioned investors against recent unaudited quarterly results declared by companies especially in the B and Z category.

These unaudited results, on a close reading, may appear to indicate an extraordinary level of improvement in the company. In certain cases, the figures of sales or turnover for the quarter ended on December 31, 2003, has increased manifold.

Further, these companies also appear to be giving additional information like placing of preferential issues in a tentative price range and proposed high dividend or bonus, in the footnote to their unaudited results, BSE said.