According to figures released by Sebi, in the week to June 19 the net FII outflow stood at $48.6 million or Rs 196.5 crore. The cumulative net investment has fallen to $8,840.5 million in June as against $9,041.2 million in the preceding month. Addressing media persons here today immediately after the board meeting, Sebi chairman DR Mehta released the daily net investment figures and drew attention to the positive net inflow of $1.5 million on June 12. The total net outflow in April was $24.8 million while May saw a higher net outflow of $218 million.

According to Mehta, the Southeast Asian market crisis, expectations of a depreciation in the Chinese currency in addition to a falling rupee, the impact of sanctions, the flat budget and the general economic conditions haveall had a negative impact on FII investments in the country. A total net outflow of nearly $450 million has been reported over the last three months which will definitely reflect on the market, he added.

On the current volatility in the market, Mehta said, "Volatility in the market has stabilised over the last few days." However, he also said that had it not been for the measures introduced by Sebi, the market would have witnessed more volatility.

The market watchdog has also called a meeting of the inter-exchange co-ordination committee to review the ban imposed on short sales recently. "The committee consisting of representatives from the various stock exchanges will review the ban and also consider different alternatives to counter the ban. These would be in the form of additional margins or some other measures," said a senior Sebi official.

"The ban on short sales is in consonance with the existing system in the international market," said Pratip Kar, executive director, secondary market,Sebi.

According to a study carried out by Sebi, short sales are generally regulated in the various developing and emerging markets. The US market does not allow short sales in a falling market, the rationale being that short sales should be used only for hedging and not hammering of stocks. The market regulator is in discussion with various stock exchanges on additional steps that can be taken to counter the volatility in the market. BSE and NSE have also assured the regulator of immediate implementation of the stockwatch system.