The Hindu : Business : SEBI chief downplays U.S. sub-prime crisis

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Friday, Aug 10, 2007
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SEBI chief downplays U.S. sub-prime crisis

Special Correspondent

‘There are several factors for market swings’

NEW DELHI: The Securities and Exchange Board of India on Thursday sought to downplay the issue of financial developments in the U.S. affecting Indian bourses, saying that it would not be proper to link volatility in domestic stock markets to the U.S. sub-prime crisis.

“I think to relate movement of indices to one factor, especially when that is an external factor, would be over simplification,” SEBI Chief M. Damodaran said, while responding to reporters’ queries whether the sub-prime crisis in the U.S. is affecting Indian markets.

There were several other explanations why share markets were up or down, he said on the sidelines of JRD Tata Memorial lecture here.

“I think it would be brave on anybody’s part to say that he or she sees any casual relationship between any particular cause and the way markets have moved,” he said.

Elaborating further, he said he was not too much worried over volatility so long as there was no disorderly conduct in the market.

The market again went into a tailspin on Thursday after snapping a two-day winning streak and closed 208 points down on cues from Europe where the markets turned weak after France’s biggest bank BNP Paribas suspended withdrawals from three mutual funds on concerns related to the U.S. sub-prime crisis.

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