Finance minister P Chidambaram coming to the rescue of the stock market and foreign institutional investors (FIIs) did not help either the markets to stop its downward journey or the FIIs to halt their selling spree.
The finance minister told the Parliament on Tuesday that FIIs were not behind the recent fall in stock markets and that there was no proposal to either ask them to withdraw from Indian market or ban them altogether. ?I do not think that FIIs trading in stock market are the reason behind volatality (in stock market) on certain days,? he said replying to supplementaries during Question Hour in the Rajya Sabha.
It may be mentioned here that after registering its second highest fall of over 900 points and 270 points, Sensex and Nifty, the key benchmarks of BSE and NSE respectively, lost further grounds on Tuesday. After opening with a slight positive gap, the Sensex finally settled for 16,339.89 points, down by 337.99 points or 2.03% while the broader S&P CNX Nifty fell by 88.75 points or 1.79% to close the day at 4,864.25 points.
?The recent fall in the stock markets is attributed among other factors, to the sub-prime mortgage crisis in the US, change in the monetary stance of developed countries, the expected recession in US (and) firming up of oil prices. There is, however, no ?proposal to ask FIIs to withdraw or ban FIIs,? he said.
The FIIs? share in the Indian market continues to be small, the finance minister said. While the benchmark Sensex declined by 7.4% on January 21, the index increased by 34.5% during this fiscal on a point-to-point basis from end of March 2007 to end of February 2008, the minister said.
Meanwhile, the Sensex has tumbled by nearly 1,486 points in the past four trading sessions. The index had its smallest loss of 1.51 points on last Thursday and second biggest of 900 points on Monday. The Nifty also dropped by 88.75 points to 4,864.25.