Thursday, September 22 2005 20:16 Hrs (IST) - World Time -

New Delhi: The Government and regulators today (Sept 22, 2005) stepped up vigil in the face of volatility in the stock market but the Finance Ministry asserted that there was no need to panic as the price movements were based on fundamentals.

India's key share market index went into a tailspin, shedding 266 points to close at 8,221.64 points on fears of multi-agency probe into the thrilling stocks upsurge and the raids on stock brokers by Income Tax sleuths.

The Government maintained that everything was all right but for some manipulation in penny stocks whose contribution in the overall market capitalisation was very small.

Proactive steps were being taken, including ordering probes into the source of funding, but there was no need to panic and today's market crash was only a technical correction, a Government official said.

Movement in the 30 blue chip companies share index, Sensex, and the NSE top 50 scrip-based index Nifty was based on fundamentals, the official said.

Small-cap and Mid-cap stocks faced investors' wrath following reports that the Government and the financial market regulators have widened its investigation to examine FII inflows in the segment.

The BSE Small-Cap Index crashed by 460.32 points or 7.62 per cent to 5,579.25 and BSE Mid-Cap Index fell by 236.76 points or 5.60 per cent to 3,991.03.

However, Finance Ministry said there was no nation-wide raid by taxmen on stockbrokers. Only some brokers in Ahmedabad were raided.