CHECKING SLIDE Sebi orders probe, halts payout in 4 mid-cap scrips

Mumbai: Market regulator Sebi on Wednesday stopped payout of funds and securities for some trades executed on Monday in at least four mid-cap stocks that witnessed hectic activity in the last three days. 

    The stocks included Core Education, Eros International, ABG Shipyard and Welspun Corp, top sources confirmed to TOI. Sebi has also started an investigation into this sudden and sharp fall in about 10-12 mid-cap stocks. 
    The regulatory move came even as there were widespread talks about selling of a large number of midcap stocks in which some of the leading speculators in the market had built positions but failed to meet their margin commitments to their respective brokers. Market sources said some of these brokers and clients are scheduled to meet on Thursday to discuss the situation arising out of the regulatory move, which has been taken to mitigate market risks and stop alleged manipulations. 
    In the market, there are some brokers who finance speculators and traders (also called market operators) to take positions in stocks for intra-day trades. 
    In this case, as the prices of some speculative stocks fell sharply, leading to losses for operators, brokers liquidated those speculative positions, pulling down the prices further. The regulatory direction came on the same day U K Sinha, chairman, Sebi, said in Hyderabad that the regulator was probing crash in the prices of about 10-12 
mid-cap shares on Monday. On that day, the stock price of Core Education had crashed 62%. On Wednesday it took a further knock of 46% to close at Rs 60. Last Friday, the stock had closed at Rs 304. So in just three sessions, the stock has lost 80% of its value. Without disclosing any details, Sinha said that the probe was started on Tuesday. "A similar attempt was made sometime in July in about four-five scrips and we identified the people who tried to manipulate the market, passed orders against them and took risk mitigation measures," Sinha was quoted by PTI. 
    The decision to stop payout means the sellers of these stocks in Monday's session, did not get funds in Wednesday's settlement and those who bought the shares did not receive credit of these shares in their demat accounts. The sources, however, said that not all the payouts for Monday's trades were suspended by Sebi. 
    Market players said midcap stocks in which speculators and operators were active are expected to witness further selling in the next few sessions since investors will be loath to trade in these counters. In the last three days there were also market talks that part of the promoters holdings in these stocks which were pledged by them, were sold in the market by their financiers/brokers. 
    However, on Wednesday, through an email Maya Sinha, ED, Core Education, denied that any of Core's pledged shares were sold. Mkt rebounds on optimistic Eco Survey 
Mumbai: Dalal Street witnessed a rebound after Tuesday's selloff on the back of optimistic growth projections in the Economic Survey, which was released during Wednesday's market hours. 
    Among other projections, the government expects that the GDP growth for fiscal 2014 could range between 6.1% and 6.7%, up from about 5% during the current fiscal. As a result, the sensex closed 137 points higher at 19,152 with capital goods, real estate and oil & gas stocks leading the charge. On Tuesday, the index had lost 317 points to its lowest close in 2013 on fresh fears about the debt crisis in Europe and also doubts about economic growth in India. 
    Optimistic statements in the Economic Survey also raised market's expectations from the Budget for 2013-14, due on Thursday morning, which investors want to be a pro-growth one. 
    In Wednesday's session, among the sensex stocks, Bharti Airtel closed 3.3% higher at Rs 322 while L&T closed 3.2% up at Rs 1,410 and M&M gained 3% to Rs 891. Among the index laggards were GAIL, down 1.7% at Rs 334 and Infosys, off 1.6% at Rs 2,914.