Stock market fall not linked to US sub-prime mortgage crisis

New Delhi, Aug 9 (UNI) SEBI Chairman M Damdodaran today discounted the impact of the United States sub-prime loan market troubles impacting on the Indian stock exchanges, saying that stock prices are a determinent of several factors operating on a given day.

''He will be a bold man who assumes that stock prices are a resultant of one single factor. At the end of the day the price of a stock is determined by the demand and supply of that stock," Mr Damodaran told newspersons on the sidelines of a function here.

A fall in the indices cannot be linked to one factor especially if that is external, he said.

''It would be an oversimplification if the fall in the stock market in India is linked only to sub-prime mortgage crisis in the US,'' Mr Damodaran said.

Earlier, Mr Damodaran had delivered the Tenth J R D Tata Memorial lecture organsied by ASSOCHAM.

Mr Damodran said he was not perturbed at the rise and fall of the Sensex if there was no disorderly movement on the bourses.

The market regulator said there was no casual relationship between any particular cause and the manner in which markets move.

The SEBI Chief said trading in bonds on the stock exchanges would pick up in time and attributed the low volumes to the trading having started as recently as July.

''The active trading in bonds through the exchanges has started in July and you cannot expect a high volumes overnight,'' he said.

He said he was unable to specifiy as to when the SEBI Act would be amended as the Bill in this regard after being introduced will go through a set of Parliamentary process, which takes its own time.

The BSE SENSEX fell today by 200 points primarily on cues from Europe where markets turned bearish after BNP Paribas, the largest French Bank, suspended withdrawls from three mutual funds on concerns connected with the US subprime crisis.

UNI