Mumbai: Capital market regulator Sebi today ruled out stopping short-selling as it has no evidence that short-selling is driving the market down, a top official said.

"We don't really have evidence that short-sellers are driving the market down," Sebi Chairman C B Bhave told reporters on the sidelines of a conference here.

He said that though some western markets had banned short-selling, their markets had continued to decline further. "Their (financial) institutions failed one after another. Some of them have re-started short-selling in their markets," Bhave said.

Commenting on foreign institutional investors (FIIs), the Sebi chairman said that the regulator has not found any FII having lent any shares off-shore after "We conveyed our regulatory disapproval to them on the issue".

"We are trying to look at what is happening to FIIs and why they are sellers on a net basis," Bhave said.

One of the things Sebi had found was that FIIs were purchasing as well as selling so it was not as if they were only sellers, he said.

"But on a net basis, they are sellers. So probably, long-term funds are buying into Indian market as well," the Sebi Chairman said.

On the behaviour of the stock-exchanges, Bhave said that it was not possible for Sebi or the stock-exchanges to predict when the market would rise or go down.

Source : PTI