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Systems in place to protect integrity of capital market: Govt

Last Updated: Monday, March 26, 2012 - 16:40

New Delhi: Attributing the volatility in stock markets to various global and domestic markets, the government has said there are systems in place to protect the integrity of the capital market.

"The authorities have put in place systems and practices to promote a safe, transparent and efficient market and protect market integrity," Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha on Friday.

During January 2, 2012, and March 16, stock markets moved in the range of (-) 2.73 percent to 2.77 percent, which the minister attributed to various major domestic and global factors.

He said that some of the major factors that "may have" influenced the sentiment in the market movements, include oil prices trending up due to tension over Iran, continuing crisis in euro zone and apprehension of slowdown in growth rate of China.

Also, acceleration in India's industrial production in January, slowing of headline inflation, hopes of interest rate cut by RBI and injection of liquidity of nearly Rs 80,000 crore, may have influenced the market sentiments, he added.

The Securities and Exchange Board of India (SEBI) maintains constant vigil on the market and in case of any abnormality, takes appropriate action against the concerned entities.

The systems instituted include advance risk management mechanisms, various limits on positions, margin requirements and circuit filters.

"The system and practices are reviewed continuously and modified to meet emerging needs," the minister said.

SEBI reviews regularly any difficulties\shortcomings in enforcement of stipulated regulations and necessary amendments are made in respective regulations, he said.

Both BSE and NSE rose the highest on January 3, while the maximum fall in the two exchanges was on February 27.

The market capitalisation at NSE and BSE ranged between USD 1.04 trillion and USD 1.30 trillion in the calendar year 2012 (up to March 16).


First Published: Monday, March 26, 2012 - 16:40
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