Mumbai, March 4: After the Securities and Exchange Board of India (Sebi) ordered a probe into the huge volatility in the stock markets during and after the presentation of the Union Budget, a section of brokers have sought the direct intervention of the finance ministry to loosen the grip of the cartel which has created undue panic in the bourses, particularly in new economy stocks.The brokers have asked the finance ministry to impress upon the chiefs of financial institutions like Unit Trust of India (UTI), Life Insurance Corporation of India (LIC) and General Insurance Corporation (GIC), to intervene in the market on Monday, particularly in the new economy stocks, to prevent the impending payment crisis as it is the last day of settlement on the National Stock Exchange (NSE). Tuesday being a holiday, NSE has preponed its settlement day to Monday.
These brokers have expressed their view to the senior officials of the North Block that "Mission Panic" in the market has been artificially created and has been launched with the intention to tarnish the ministry's image to revive the confidence of retail investors in the stock market, sources close to the group of brokers who have sought the finance ministry intervention said. The ministry was also apprised by these brokers about the possible political implications of `Mission Panic'. Sources said that it was explained to the ministry how the intentional crash in the new economy stocks can lead the government to danger.
They have explained to senior officials in the ministry that the opposition can take advantage of the panic created in the market by stating that the way in which the capital market has reacted to the budgetary proposals indicates failure on the part of the government.
The brokers are also planning to approach the market regulator for frequent failure of the screen-based trading systems at the two major bourses of the country, the Bombay Stock Exchange (BSE) and the NSE. The brokers community opined that the system is falling prey to organised manipulation by certain group of market operators.
At NSE, the entire system crashed for few minutes, while at BSE the system crashed for a few selective scrips.
The market which gained by around 177 points due to Budget sops on Wednesday went down by 176 points on Friday, ignoring the basic market fundamentals.
The brokers community felt that the jump in the Sensex is mainly offset because of the concerted bear operations by some market players.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
