The Securities and Exchange Board of India on Tuesday asserted that the Indian financial markets were safe for investing and there was no payment crisis on the bourses.

"We held a meeting this morning to review the settlement problem and risk management. To our mind, there is no problem in settlement," Sebi Chairman G N Bajpai said in Mumbai.

• Bloodbath on Dalal Street: Complete Coverage

Sebi also ruled out the operation of any bear cartel in the fall of the Sensex yesterday.

"Our data does not state any market misconduct. If anyone is found guilty (of market misconduct), we will take action," he said.

"The Indian financial markets are very safe for investors, he added.

Bajpai said the markets were safe for investing and "there was no need to panic".

The strong message from Sebi saw the revival on the stock markets with the BSE Sensex spurting by 196 points, or 4.45 per cent, at 4701.13 while the wide-base NSE rose by 65 points, or 4.68 per cent, at 1453.40 in the first 30 minutes of trading.

Domestic and overseas investors, he said, responded to the market sentiments on political uncertainty over reforms.

"We do not advise investors to invest or not to invest (during particular periods). Our concern is how safe the markets are and we believe there is nothing to worry about. The Indian financial markets are very safe and sound," he said.

Bajpai did not find any fault with the broking community and said: "So far the data doesn't show any misconduct. There is no settlement crisis."