After a mid-session plunge spooked markets on Friday, Sebi has said it along with RBI is closely monitoring the financial markets and would take appropriate action, if necessary.
The market regulator has also sought details from stock exchanges about large trades done on Friday and would be stepping up the vigil to prevent steep volatility, sources said.
"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," Sebi said in a statement.
In a rare move, the same statement was also issued by the RBI.
On Friday, analysts said shares of housing finance companies nosedived on rumours of liquidity crunch and scrip of DHFL plunged over 40 per cent.
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On Friday the 30-share BSE Sensex suddenly tanked 1,127.58 points, or 3.03 per cent, to hit a low of 35,993.64 in afternoon trade before staging an equally sharp recovery within minutes.
The markets had opened on a strong note. After an intra-day swing of 1,495.60 points, the Sensex closed at 36,841.60, down 279.62 points.
The broader NSE Nifty shed 91.25 points to finish at 11,143.10 on Friday.
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