SEBI Chairman U. K. Sinha, on his part, sought to calm the markets, saying regulations were in place to curb any excessive volatility.

Concerned over the sudden spurt in stock markets ahead of poll results, Finance Minister P. Chidambaram, on Tuesday, asked regulators, including the Securities and Exchange Board of India and the Reserve Bank of India, to remain alert and take necessary actions to curb excessive volatility.

SEBI Chairman U. K. Sinha, on his part, sought to calm the markets, saying regulations were in place to curb any excessive volatility.

Emerging from the meeting of the Financial Stability and Development Council (FSDC), where the volatility in stock markets figured during discussions, RBI Governor Raghuram Rajan said the central bank was prepared to deal with any kind of eventuality that might occur over next few days.

Over last three trading sessions, the BSE benchmark Sensex has rallied over 1,500 points and the NSE’s Nifty nearly 450 points. The markets are expected to remain volatile in view of the results of the general elections which will be announced on May 16.

At the meeting, Mr. Chidambaram, according to a Finance Ministry statement, urged all the regulators to be watchful of developments in the market and large volatility in key parameters.

Mr. Chidambaram also called upon the regulators and the Ministry officials “to be in a state of readiness and take necessary action if the situation so warrants.’’

Mr. Sinha said the market regulator was watching the situation very carefully and all the systems were in place.

“There is no need for anybody to worry. If we find that anybody is doing anything wrong, is in violation of any of SEBI’s regulation, we will take prompt action,” Mr. Sinha said.

Dr. Rajan too said: “The regulators have examined the financial system over last few weeks. We have conducted a variety of tests. We are in many ways prepared for any kind of volatility that might emerge over the next few days”.

FSDC meeting

The 10th meeting of the Financial Stability and Development Council (FSDC), on Tuesday, took stock of the Indian economy and deliberated on domestic and growth scenario, fiscal, monetary and external sector, foreign capital flows.

It also discussed on inflation, developments in financial markets as also the outlook and challenges facing the economy.

The council also discussed the detailed assessment of external sector vulnerabilities of the economy while recognising the improvement made in controlling CAD, exchange rate volatility.

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