09-22-2005, 07:30 PM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>PM 'loses sleep', markets lose points </b>
Pioneer News Service / New Delhi
Many years ago when the Harshad Mehta market boom was at its height, then <b>Finance Minister Manmohan Singh told Parliament that "I don't lose sleep over what happens in the share market."</b>
But this time he appears to have done so already. Finding the Sensex a bit too hot to handle, on Wednesday Prime Minister Manmohan Singh spoke to Finance Minister P Chidambaram about his concern on the market rally. As a result, the Finance Minister directed joint secretary capital markets UK Sinha to rush to Mumbai.
According to reports, the Government is investigating the role played by a large number of prominent NBFCs and broking firms in the wide swing in the stock market. A probe is also on to assess whether cooperative banks have been used for routing funding to brokers. Market is also abuzz with the news that Indian money stashed abroad is flowing back through FII sub-accounts.
<b>The Government and regulators have also stepped up vigilance, probing FII inflows through Mauritius. </b>Intelligence Bureau has despatched two additional directors to Mumbai to investigate whether any manipulation has led to the surge in the market.
<b>The Government's well-publicised concern over the PM 'loses sleep', markets lose points "unreal" market boom evidently triggered the correction on Thursday</b>. On top of it, the I-T crack down on the stockbrokers and other "suspect" market players played in a sharp decline in the Sensex and the collapse of the penny stocks boom.
In connection with the recent unjustified run-up in the penny stocks and small cap, the Income Tax Department on Thursday carried out raids on stock brokerages in Ahmedabad and Rajkot. The offices of five Gujarat-based stockbrokers have been raided. The brokerages raided in Ahmedabad include the Marwari Group, Praveen Ratilal Share Broker, Monarch Project and Finance, We & You and Mahipat Rai Chand.
The department raided 25 branch offices of the brokers in Mumbai, Ahmedabad and other cities in the region. According to reports, the brokers have been raided for allowing trade without margins. <!--emo&:angry:--><img src='style_emoticons/<#EMO_DIR#>/mad.gif' border='0' style='vertical-align:middle' alt='mad.gif' /><!--endemo-->
Following the news, penny stocks lost further ground. Birla Ericsson, Maral Overseas and Aksh Optifibre ended the day in the red and the market tasted the sharpest fall after Black Monday of May 17. The benchmark index, the Sensex shed 265 points to close at 8,221.
The raids come a day after the market regulator SEBI said it plans to closely scrutinise any potential speculators.
However, towards the end of trading session on Thursday, Ministry of Finance clarified that the I-T Department is not conducting nationwide raids on brokerages. The officials have further said that no NBFC or broker is under the Finance Ministry's scanner, adding that there is no evidence of market manipulation yet. "It is not an alarmist situation. The 30 stocks of the Sensex and the 50 stocks on Nifty have been moving on fundamentals."
The Finance Ministry says that the burden of action if any lies with Sebi and RBI.
Meanwhile, the Ministry of Company Affairs has advised that the small investors should be guided by strong fundamentals of the company whose shares they wish to deal in. Their decision should be based upon proper analysis of the background of the company, the promoters and other relevant considerations.
It said that economy is doing very well. Quarterly results of the companies in general reflect a very healthy growth rate, the Ministry said in a release
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Pioneer News Service / New Delhi
Many years ago when the Harshad Mehta market boom was at its height, then <b>Finance Minister Manmohan Singh told Parliament that "I don't lose sleep over what happens in the share market."</b>
But this time he appears to have done so already. Finding the Sensex a bit too hot to handle, on Wednesday Prime Minister Manmohan Singh spoke to Finance Minister P Chidambaram about his concern on the market rally. As a result, the Finance Minister directed joint secretary capital markets UK Sinha to rush to Mumbai.
According to reports, the Government is investigating the role played by a large number of prominent NBFCs and broking firms in the wide swing in the stock market. A probe is also on to assess whether cooperative banks have been used for routing funding to brokers. Market is also abuzz with the news that Indian money stashed abroad is flowing back through FII sub-accounts.
<b>The Government and regulators have also stepped up vigilance, probing FII inflows through Mauritius. </b>Intelligence Bureau has despatched two additional directors to Mumbai to investigate whether any manipulation has led to the surge in the market.
<b>The Government's well-publicised concern over the PM 'loses sleep', markets lose points "unreal" market boom evidently triggered the correction on Thursday</b>. On top of it, the I-T crack down on the stockbrokers and other "suspect" market players played in a sharp decline in the Sensex and the collapse of the penny stocks boom.
In connection with the recent unjustified run-up in the penny stocks and small cap, the Income Tax Department on Thursday carried out raids on stock brokerages in Ahmedabad and Rajkot. The offices of five Gujarat-based stockbrokers have been raided. The brokerages raided in Ahmedabad include the Marwari Group, Praveen Ratilal Share Broker, Monarch Project and Finance, We & You and Mahipat Rai Chand.
The department raided 25 branch offices of the brokers in Mumbai, Ahmedabad and other cities in the region. According to reports, the brokers have been raided for allowing trade without margins. <!--emo&:angry:--><img src='style_emoticons/<#EMO_DIR#>/mad.gif' border='0' style='vertical-align:middle' alt='mad.gif' /><!--endemo-->
Following the news, penny stocks lost further ground. Birla Ericsson, Maral Overseas and Aksh Optifibre ended the day in the red and the market tasted the sharpest fall after Black Monday of May 17. The benchmark index, the Sensex shed 265 points to close at 8,221.
The raids come a day after the market regulator SEBI said it plans to closely scrutinise any potential speculators.
However, towards the end of trading session on Thursday, Ministry of Finance clarified that the I-T Department is not conducting nationwide raids on brokerages. The officials have further said that no NBFC or broker is under the Finance Ministry's scanner, adding that there is no evidence of market manipulation yet. "It is not an alarmist situation. The 30 stocks of the Sensex and the 50 stocks on Nifty have been moving on fundamentals."
The Finance Ministry says that the burden of action if any lies with Sebi and RBI.
Meanwhile, the Ministry of Company Affairs has advised that the small investors should be guided by strong fundamentals of the company whose shares they wish to deal in. Their decision should be based upon proper analysis of the background of the company, the promoters and other relevant considerations.
It said that economy is doing very well. Quarterly results of the companies in general reflect a very healthy growth rate, the Ministry said in a release
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