SEBI

SEBI statement on market fall owing to concerns relating to COVID-19 pandemic

SEBI statement on market fall owing to concerns relating to COVID-19 pandemic, resultant fear of economic slowdown, recent fall in global crude prices, etc. 

Securities and Exchange Board of India

PR No.16/2020

SEBI statement on market movement

 Over the last few days the Indian Stock Market has been moving in tandem with other global markets owing to concerns relating to COVID-19 pandemic, resultant fear of economic slowdown , recent fall in global crude prices, etc. As can be seen from the following table giving a comparative market movement of global indices, it indicates that the fall in the Indian indices has been significantly lower than the stock market in other countries. Movement of major global indices are tabulated below:

Region

Index

Closing Index Value as on 12/03/2020

Closing Index Value as on 31/01/2020

% Change

Russia

RTS

966.40

1,517.07

-36.30%

Brazil

BOVESPA

72,583.00

113,760.60

-36.20%

France

CAC

4,044.26

5,806.34

-30.35%

Germany

DAX

9,161.13

12,981.97

-29.43%

Argentina

MERVAL

28,351.89

40,105.04

-29.31%

United KinQdom

FTSE 100

5,237.50

7,286.01

-28.12%

United States

DJIA

21,200.62

28,256.03

-24.97%

United States

NASDAQ

7,201.80

9,150.94

-21.30%

Japan

Nikkei

18,559.63

23,205.18

-20.02%

India

Nifty 50

9,590.15

11,962.10

-19.83%

India

Sensex 30

32,778.14

40,723.49

-19.51%

Singapore

Strait Times

2,678.64

3,153.73

-15.06%

South Korea

KOSPI

1,834.33

2,119.01

-13.43%

Taiwan

TAIEX

10,422.32

11,495.10

-9.33%

Hong Kong

Hang Seng

24,309.07

26,312.63

-7.61%

China

Shanghai Composite

2,923.49

2,976.53

-1.78%

SEBI and Stock Exchanges have a robust risk management framework in place which automatically gets triggered in response to movements in the indices (BSE Sensex and NSE Nifty) as well as individual stocks both in cash and derivatives market. Some of these measures include:

  • Value at Risk (VaR) Margin with  initial margin to cover  99%  risk of a transaction
  • Extreme Loss Margin (ELM) to cover the residual risk of a transaction
  • Collection of mark to market losses on daily basis
  • Additional surveillance margins based on stress tests
  • Circuit filters at index levels
  • Circuit filters at stock levels
  • Action on the basis of surveillance inputs
  • Regular follow up by the clearing corporations with the clearing members for collection of margin and pay-in

The positions of margin payments,margin utilization, adequacy of collaterals (securities deposited by the brokers with the clearing corporations) and the pay-in’s obligations being met by the clearing members (brokers) are being continuously monitored. Similarly, the settlement and clearance of trades are also being constantly monitored.

SEBI and Stock Exchanges are prepared to take suitable actions as may be required.

Mumbai
March 13, 2020

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