‘Protect investors from stock mkt errors’

But shun circuit-breakers,say analysts.

With the benchmark Sensex on Tuesday skidding over 600 points on erroneous trading in bluechip RIL shares,analysts feel regulations should be in place to safeguard investors’ interest,but are not in favour of circuit breakers for frontline stocks.

Shares of the most-valued firm Reliance Industries,which has the maximum weightage on the Sensex,tanked 20 per cent due to a faux pas over ICICI Bank share quotations. This,in turn,pulled down the broader market over 600 points to an intra-day low of 16,318.39 points.

“SEBI and the stock exchanges need to urgently explore measures to prevent what happened today. The regulator should assure investors that these kind of aberrations are not normal and also ensure adequate safeguards to prevent such instances,” Azad Financial Services Director Amit Azad said.

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According to marketmen,the freak sale happened after some trader offloaded about 62,000 shares of RIL at an unbelievable level of Rs 840.55 against yesterday’s close of Rs 1,045.05.

Shares of RIL closed at Rs 1,011.55,down 3.21 per cent.

After trimming some of its early losses,the 30-share Sensex closed down 372.60 points,or 2.20 per cent,at 16,572.03.

CNI Research Chairman and Managing Director Kishor P Ostwal said that circuit filters for frontline stocks are not a good option,as they would create restrictions in the derivative segment of such stocks.

Echoing a similar view,Unicon Financial Chief Executive Officer Gajendra Nagpal pointed out that SEBI should take preventive steps,but circuit breakers are not a great idea.

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Last month,US regulators proposed circuit filters for top trading stocks to rein in volatility of individual stocks.

The move came after American market’s Dow Jones Industrial Average shed over 1,000 points in a few minutes on May 6. The sudden fall was reportedly attributed to technical glitches,which resulted in some investors offloading a premium stock.