FM Nirmala Sitharaman defends Indian stock market following SEBI concern

The Indian stock market has kept “a certain level of sanity” and it should be allowed to play on its own despite huge fluctuations globally, finance minister Nirmala Sitharaman said on Friday (March 15).

She spoke days after Sebi chairperson Madhabi Puri Buch said there are pockets of froth in the small and midcap stocks and the regulator is looking into it to come out with a possible consultation paper.

Nirmala on markets

Addressing the India Today Conclave in New Delhi, Sitharaman said: "I allow the markets to play on their own... We should leave it to the wisdom of the market because all of us have seen that despite huge fluctuations globally, the Indian market has maintained a certain level of sanity.

“It hasn't really gone too violent this way or that way. So, I place a lot of trust in the market."

Sebi’s concerns

Earlier this week, the capital markets regulator raised concerns about over valuations of small and midcap stocks, indicating possible market manipulation and the risk of a market bubble.

On Crypto assets, Sitharaman said they cannot be currencies and that's the Indian government’s stand.

Currencies are to be issued by the government or the central bank of the day, she said.

Crypto assets

Crypto assets are technology-driven and have a bearing on cross-border payment, she said, adding that a comprehensive regulatory framework around such assets has been considered at the G20 level.

"If one country regulates and others don't, it will be an easy way of moving money, round-tripping or funding drugs or even terrorism and so on,” she said.

“So, we wanted to create a framework by taking it to the level of G20. It has been very well received, and I'm sure there will be some framework emerging," the minister added.