No Evidence Of Unfair Trading In Post-Election Market Crash: Minister Of State For Finance
June 4 saw a severe market downturn, with the Sensex plummeting 4,390 points, nearly 6%, marking the worst single-day drop in four years.
Capital markets regulator Securities and Exchange Board of India has not received any specific information regarding "unfair trading" linked to the stock market crash on June 4—the day of the Lok Sabha poll results—which resulted in significant investor losses, Parliament was informed on Monday.
In a written response to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary explained that stock market fluctuations are influenced by investor perceptions and various other factors.
Chaudhary addressed the issue in response to a query about the unprecedented fall in stock prices and a reported Rs 30 lakh crore loss to investors, immediately following the general elections of 2024.
The minister confirmed that while SEBI has received representations concerning the stock market movements on that day, no specific evidence of unfair trading has been presented.
On June 3, the benchmark BSE Sensex surged by 3.4% to a new closing peak, following exit polls predicting a decisive BJP victory in the general elections.
However, the following day saw a severe market downturn, with the Sensex plummeting 4,390 points, nearly 6%, marking the worst single-day drop in four years.
"On June 4, 2024, the date of the general election results announcement, the Sensex and Nifty 50 decreased by 5.7% and 5.9%, respectively. The indices recovered within three days and have since reached record levels, with an increase of 12.9% and 13.3%, respectively, as of July 18, 2024," Chaudhary said.
He added that the approximate Rs 30 lakh crore decrease in market capitalisation on June 4 was fully recovered within five days, and by July 18, market capitalisation had increased by around Rs 59 lakh crore.
SEBI, as the statutory regulator of the securities markets, is tasked with maintaining regulatory and surveillance frameworks to ensure stable market operations and investor protection.
The regulator conducts regular surveillance to uphold market integrity and addresses any alleged violations of its regulations through appropriate enforcement actions under the SEBI Act, 1992.
Chaudhary highlighted that stock market movements depend on investor perceptions and other factors, including global economic conditions, foreign capital flows, domestic macroeconomic parameters, and overall corporate performance.
(With inputs from PTI)
