When the scam broke out, the markets were closed due to a brokers' strike and the operators could not liquidate their holdings to pay back their debts or what they owed to the exchanges. That had led to a virtual stampede on the exchanges for offloading the paper. Also at that time, no one was willing to buy stocks as they feared that the deals may not be honoured and their funds may get stuck in poorly regulated exchanges. Fortunately, things are very different now. Stock exchanges are well regulated.
Brokers have adequate capital base as well as substantial margins with the exchanges.
The stock exchanges themselves have large trade guarantee funds that can be used to meet contingencies like the present one. Stocks are traded in dematerialised form, so there are no fears over the genuineness of the holdings. The market has the presence of a large number of institutional players who have the financial muscle to withstand short term pressures. All these ensure that the markets remain healthy. As far as the impact on stock prices is concerned, our view is that in the medium term prices will be driven by fundamentals and global trends rather than these short term gyrations.