SEBI lacks specific data on unfair trading during poll results day: minister
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On June 4, equity markets experienced a severe downturn, with the Sensex plummeting by 4,390 points, nearly 6 percent, marking the worst single-day fall in four years.
Despite this significant market crash coinciding with the Lok Sabha poll results, the Securities and Exchange Board of India (SEBI) did not receive any specific information regarding 'unfair trading' activities on that day.
This information was provided to Parliament on Monday by Minister of State for Finance Pankaj Chaudhary.
In a written response to the Lok Sabha, Minister Chaudhary explained that stock market movements are influenced by investor perceptions along with various other factors. He addressed a query concerning the unprecedented drop in stock prices and the resultant loss of approximately ₹30 lakh crores in investor wealth immediately after the 2024 general election results.
He also responded to whether SEBI was urged to investigate the matter. "Though SEBI has received representations regarding these stock market movements, no specific information on any unfair trading has been provided," Chaudhary stated.
The benchmark BSE Sensex had surged by 3.4 percent to a new closing peak on June 3 following exit polls predicting a decisive BJP victory in the general elections. However, the subsequent day witnessed a dramatic reversal, with the Sensex plunging by 4,390 points. This severe decline saw the Sensex and NIFTY-50 indices drop by 5.7 percent and 5.9 percent, respectively.
Remarkably, both indices recovered within three days, achieving record levels by July 18, with increases of 12.9 percent and 13.3 percent, respectively.
Chaudhary further elaborated that the initial loss of around ₹30 lakh crores in market capitalization of companies listed on the NSE and BSE on June 4 was recovered within five days. As of July 18, the market capitalization had increased by approximately ₹59 lakh crores.
As the statutory regulator of securities markets, SEBI is responsible for maintaining regulatory and surveillance frameworks to ensure stable operations and the development of securities markets. SEBI conducts regular surveillance to enhance market integrity and protect investors' interests. Any suspected violations of its regulations are thoroughly investigated, with appropriate enforcement actions taken based on the investigation findings under the powers granted by the SEBI Act, 1992.
Chaudhary emphasized that stock market fluctuations are driven by investor perceptions and other factors such as global economic conditions affecting foreign capital flows, domestic macroeconomic parameters, and overall corporate performance.
