SEBI Denies Knowledge Of Unfair Trading On Poll Day Results

SEBI Denies Knowledge Of Unfair Trading On Poll Day Results

Investors wealth worth billions was wiped out on that date

The Securities and Exchange Board of India (SEBI) has informed the Parliament that it did not receive any information on 'unfair trading' in the stock market crash on June 4, when the results of the Lok Sabha General Elections 2024 were declared.

In a note to the Lok Sabha, the Minister of State for Finance, Pankaj Chaudhary stated that the stock market movements were a function of investor perceptions, including global economic scenarios affecting foreign capital flows, domestic macro-economic parameters and overall corporate performance.

The minister was responding to a query on the unprecedented fall in stock prices and points causing Rs.30 lakh crores loss to investors following the results.

On whether there was a demand to investigate the matter by the SEBI, he said, "Though SEBI received representations on the stock market movements, no specific information on any unfair trading has been provided.”

Meanwhile, on June 3, the benchmark Bombay Stock Exchange (BSE) Sensex had shot up 3.4 percent to settle at a closing peak, after exit polls predicted a resounding victory for the Bhartiya Janata Party (BJP). But a day later, equity markets witnessed a bloodbath with Sensex tanking 4,390 points or nearly 6 percent, the worst single-day fall in four years.

Chaudhary informed, "On 4 June, when the General Elections results were announced, Sensex and Nifty-50 decreased by 5.7 percent and 5.9 percent, respectively. The indices recovered within three days and reached record levels, registering an increase of 12.9 percent and 13.3 percent, respectively on 18 July.”

The minister added, "The decrease of Rs.30 lakh crore in market capitalization of companies listed on the National Stock Exchange (NSE) and BSE on 4 June recovered within five days. It increased by Rs.59 lakh crore.”

SEBI is mandated to regulate and carry out surveillance frameworks to effect stability of operations and market’s development. The scrutiny is conducted to enhance market integrity and safeguard the investors’ interests.

Any violation of the capital markets regulations is investigated. Based on the findings, appropriate enforcement action is initiated by it under the SEBI Act, 1992.