BackSebi monitoring markets, discussing emergency measures with RBI
The regulator will wait for the opening of London and Europe market to assess any need for special circuit filters
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Mumbai: Capital markets regulator Securities and Exchange Board of India (Sebi) is monitoring the markets and feels that trading conditions are under control for now, said two Sebi officials, on the condition of anonymity.
Equity markets have fallen sharply after Britain decided to exit the Eurozone in a referendum held on Thursday. The markets, which had discounted the possibility of an exit, saw a surge in volatility after the poll verdict became clear.
The MSCI Asia Pacific Index dropped 4.3%. Trading on S&P and Nasdaq futures was suspended after they hit the 5% lower circuit. In India, BSE’s 30-share Sensex tumbled as much as 3.7% or 1,005 points in morning trade, logging its biggest fall since 24 August to 25,996.33. National Stock Exchange’s 50-share Nifty fell 3.8% or 310.85 points to 7,959.60 points in intraday trade.
Also Read: Britain votes to leave EU, unleashing global turmoil
“Exchanges have been put on alert and have been specifically asked to monitor algorithmic trades," said the first official quoted above.
According to the second official quoted above, Sebi and the Reserve Bank of India (RBI) are in touch and emergency measures have been discussed. These emergency measures can be activated at short notice if required, said this person. These measures could range from opening a liquidity window if mutual funds face large redemption to a dollar swap facility for oil importers.
The regulator will wait for the opening of London and Europe market to assess any need for special circuit filters, the second official added. Under current rules, the circuit filter gets triggered after a 10% fall in the benchmark indices.
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