Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusiness

SEBI probing Friday's stock market crash for trading irregularities: Report

The Securities and Exchange Board of India is probing whether brokers and investors conspired the sharp sell-off and subsequent recovery in financial shares

September 25, 2018 / 10:45 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

The Securities and Exchange Board of India (SEBI) is investigating whether brokers and investors conspired during Friday's sharp sell-off and subsequent recovery in shares such as Dewan Housing Finance Corporation (DHFL), Yes Bank and other lenders, according to a report in Bloomberg.

According to the report, the market regulator is reportedly reviewing data from BSE Sensex and NSE’s Nifty 50 to find which parties bought and sold shares as well as the sequence of the trades.

Also read — DHFL says it has not defaulted on any repayments

If SEBI finds any evidence of wrongdoings, it may launch a full investigation, the people told the news portal.

Moneycontrol could not independently verify the report.

The Reserve Bank of India on September 23 said it was closely monitoring the financial market along with SEBI.

"The Reserve Bank of India and the Securities and Exchange Board of India are closely monitoring recent developments in financial markets and are ready to take appropriate actions, if necessary," the central bank said in a statement.

Also read — Friday’s carnage in NBFCs, midcaps underscores vulnerability of F&O positions

The statement came after the Indian stocks turned volatile on September 21, primarily dragged by NBFCs and housing finance companies on reports the firms were facing a liquidity crunch.

The share price of DHFL plunged as much as 60 percent to hit a fresh 52-week low of Rs 246.25 amid high volumes before paring losses to end down 43 percent. Yes Bank slumped as much as 34 percent before recovering to close down 29 percent. Stocks of Indiabulls Housing Finance and LIC Housing Finance were also down by over 20 percent and 15 percent, respectively, at one point. Shares of Bajaj Finance and Bajaj Finserv too took a hit.

Also read — Explained: Why DHFL and other NBFC stocks took a beating on Friday?

The market regulator believes that low trading volumes in financial stocks did not warrant the size of the share price swings, the report said.

The market watchdog is said to be examining data to determine if trading took place based on the unpublished price-sensitive information. Some of the lenders have reportedly briefed the stock-exchange authorities on the September 21 crash.

Moneycontrol News

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347