Seeking to cool down sentiments in the wake of the bloodbath on the bourses, the Congress-led government in the making asked its allies to 'exercise restraint' and warned of stern action against manipulators for creating 'unnecessary panic' in the stock market which crashed on Monday.

Promising to take measures for 'stable, orderly and disciplined' bourses in a bid to restore confidence in the stock markets, senior congress leader Manmohan Singh, widely perceived to be the finance minister in the new government, said, "The new government will not hesitate to take action against those who seek to manipulate the markets and create unnecessary panic."

Reacting to the worst-ever Sensex crash that led to its freeze twice before signs of recovery, he asked Congress allies to exercise restraint in making statements. He was apparently referring to the anti-divestment stance of the Left parties.

Making a statement on behalf of the United Progressive Alliance, Singh said he also shared his concern with the outgoing Finance Minister Jaswant Singh, who appreciated the former's remarks.

Manmohan Singh promised Jaswant Singh that they would 'work together' and said 'we will support any action taken by outgoing NDA government' to restore order in the turbulent capital markets.

Later voicing concern over the bloodbath in the bourses, Jaswant Singh said: "We, in the finance ministry and the NDA, have worked for healthy capital market, both primary and secondary."