Closely monitoring financial markets along with SEBI, ready to take actions: RBI

The central bank in its press release today said that “the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) are closely monitoring recent developments in financial markets and are ready to take appropriate actions, if necessary”.

The stock market witnessed sudden plunge as Yes Bank sank to its lowest since 2016 and Deewan Housing recorded a steepest loss on record. As a result of the meltdown in shares of bank and financial services, there was panic among investors as they feared few of these companies might not be able to roll over their loans and service their immediate short-term debt obligations. 

After the news of the defaults in loan payment, financial disclosure and corporate governance by Infrastructure Leasing & Financial Services Ltd., fear of liquidity crisis is hovering on the debt market. Investors are in a doubt about the financial market. The market can expect a bearish phase.

In a rare move, the #RBI and #Sebi said they are “closely monitoring” activities in the financial markets and ready to take appropriate actions, following a sharp meltdown on Friday.https://t.co/cCTuzjgMgC

— The New Indian Express (@NewIndianXpress) September 23, 2018

“IL&FS’ problem and Yes Bank’s issues are impacting every financial stock in the market,” said A K Prabhakar, head of research at IDBI Capital Market Services Ltd.

On Friday, the indices closed in the red for the fourth day in a row. The investors incurred loss of a massive Rs. 5.6 lakh crore.

Due to the widening current account deficit and rising global tensions, overseas investors are also pulling out from the capital market. The Indian currency is also on a downward trend in the wake of rising crude oil prices.

Nifty outlook says that, some swings in the market are expected and before it stabilises, some range bound volatile oscillations are possible.