NEW DELHI/MUMBAI, March 8 (Reuters) - India's market
regulator said on Friday it had halted the settlement of trades
related to a steep sell-off in mid-cap shares last month as it
investigates potential manipulation.
Indian mid- and small-sized stocks slumped in the last week
of February on speculation that so-called pledged shares were
being sold off.
Controlling stakeholders of Indian companies often receive
loans from financial institutions, pledging their shares as
collateral, making these stocks vulnerable to any rumours of
"We have stopped the payout," U.K. Sinha, chairman of
Securities and Exchange Board of India, told reporters.
Sinha gave no further details, saying that it was too early
in the investigation.
India's mid cap shares have been under pressure this year
due to concerns about their earnings.
Rumours alone can spark sell-offs that can then trigger
actual margin pressures on the pledged shares, creating a
(Reporting by Manoj Kumar and Rafael Nam Editing by Jeremy