The Securities and Exchange Board of India (SEBI) has recently concluded its investigation into allegations of market manipulation and insider trading following the release of exit poll results on June 3, 2024. According to sources, SEBI found no evidence supporting these claims.
On June 3, 2024, the stock market experienced a significant rally after the exit poll results were made public. However, the following day, June 4, 2024, saw a sharp decline in the market, leading to investor losses exceeding Rs 31 trillion. This dramatic fluctuation prompted concerns and allegations from various quarters, including a group of Members of Parliament.
Trinamool Congress (TMC) Rajya Sabha MP Saket Gokhale was among those who voiced suspicions about the unusual market activity. In his letter to SEBI, Gokhale called for an investigation into whether the BJP and polling agencies had manipulated the stock markets through the release of skewed exit polls.
He argued that the exit polls, which predicted the National Democratic Alliance (NDA) winning around 367 seats, were potentially designed to influence market behaviour. The subsequent sharp decline in stock prices, following the actual election results showing the NDA securing only 293 seats, fueled his concerns.
SEBI responded to these allegations by conducting a thorough analysis of market data from all relevant infrastructure institutions. The regulatory body scrutinised trading patterns and transactions surrounding the exit poll release.
After an exhaustive review, SEBI reported that it found no irregularities or evidence of market manipulation or insider trading. Sources indicated that SEBI's data analysis revealed no activities that could be construed as manipulation or unfair advantage.
The market's reaction on June 3, with the Sensex and Nifty indices rising by over 3%, was largely attributed to the optimistic exit poll forecasts. These forecasts suggested a strong performance by the NDA, which historically has been seen as favourable for market sentiments.
However, when the actual election results were announced, showing the NDA winning fewer seats than anticipated, the market corrected itself with a significant 6% drop on June 4.
Gokhale's concerns were primarily rooted in the abnormal market behaviour observed over these two days. He suggested that entities or investors might have profited from the initial market surge based on the exit poll predictions, only to see a sharp decline once the actual results were known. However, SEBI's findings have clarified that no such manipulation took place.
The SEBI investigation aimed to maintain the integrity and transparency of the financial markets, ensuring that all trading activities were conducted fairly. The regulator's commitment to thoroughly investigating these allegations underscores its role in safeguarding investor interests and upholding market confidence.
SEBI's investigation has provided a clear verdict: there was no market manipulation or insider trading on the exit poll day. The stock market's movements on June 3 and June 4 were reactions to the exit poll results and subsequent election outcomes, rather than the result of any illicit activities. This conclusion helps restore confidence in the market's functioning and assures investors of its robustness against manipulation attempts.
Follow us
