Finance Minister P. Chidambaram today sought to assuage the stock markets, after BSE Sensex declined by over 350 points, by asserting that there was no need for any "nervousness" and the participants should read the situation correctly rather than be influenced by external developments.
"...there is no need for any kind of nervousness. I am looking forward to June and the second quarter with much greater confidence. I think the Indian market should read the situation correctly rather than being influenced by something which is happening elsewhere", he said.
The Minister was reacting to sudden crash in Indian stock markets in response to a statement by Federal Reserve Chairman Ben Bernanke in which he had talked about scaling back of stimulus with improvement in economic conditions. The BSE Sensex slipped by 365 points to 19,697.44 points during the intra-day trade. The markets later recovered.
STOCK MARKETS LINKS
"We have been looking at what is happening in the market. We think that Bernanake's statement has been misunderstood or misinterpreted.
"If we read the statement carefully, he has clearly indicated that he will continue with quantitative easing in the foreseeable future at about USD 85 billion a month or so", Chidambaram said.
The Minister further said that quantitative easing is continuing in Japan and Europe and there have been no change whatsoever and the flows into India during May have been extremely copious.