Regulator Sebi and stock exchanges are beefing up their surveillance and risk management systems to check possible manipulations and excessive volatility in the markets as exit polls will start pouring in for the Gujarat elections from Thursday evening. The outcome of the elections in Gujarat, the home state of Prime Minister Narendra Modi who is campaigning aggressively there, is likely to have an impact on the central government’s economic agenda as well as on Lok Sabha polls in 2019. A senior official said Sebi and bourses are stepping up the measures to prevent possible manipulations in trading activities and likelihood of excessive volatility after the exit polls start to come in from December 14 evening. Even though the exit poll results would come after close of markets on December 14, the outcome is expected to influence trading activities on December 15, the official added.
Besides, the counting of votes would start on December 18 morning and results would come in during trading hours. According to the official, the regulator and the stock exchanges are beefing up their surveillance and risk management systems in the run up to Gujarat election results while a close vigil would be kept on movements in Nifty futures and options on the Singapore exchange. The Nifty futures on the Singapore exchange is on focus all the more since trading starts much before Indian markets open and their trends would have an impact on domestic stocks, the official added.
Typically, manipulators tend to exploit such volatile situations in the stock market. ‘Dabba’ trading or unauthorised trading activities are already active in Gujarat. Among others, the system of circuit filters is already in place to curb excessive volatility in stocks as well as derivatives segments. With the second round of polling on December 14, Gujarat elections — which has witnessed acrimonious exchanges between the ruling BJP and Congress — would come to a close and the results would be announced on December 18.