New Delhi, Jan 21 (UNI) Describing the stock market crash today as a temporary phenomena, FICCI today attributed the largest intra-day fall to global uncertainities though it said the fundamentals of the economy remain strong.
The chamber was hopeful that the market will stabilise soon paying heed to the splendid performance of the economy.
''The fall in the stock market appears to be reflection of the weakening sentiments in major markets across the globe. This has nothing directly with the fundamentals of the Indian economy.
The Indian economy and the performance of the corporate sector remains robust and in the long run, the Indian market should certainly reflect the underlying strengths of the Indian economy,'' the chamber said.
The Federation's reaction was in line with the perception of the Ministry of Finance and many other analysts who were of the view that good sense will prevail on the market players as they will appreciate the commendable performance of the economy in the recent past as well as its future prospects.
The Bombay Stock Exchange (BSE) index fell by a whopping 987 points or 5.2 per cent-- the biggest intra-day fall in the history of India.
Reacting to the steep fall of the Sensex, PHD Chamber is of the view that the fall is mainly driven by global factors and withdrawal by FIIs on account of the perceived recession in the US.
''The investors should not panic as the steep fall seems to be a technical correction which was long overdue and has brought the market to a more realistic level,'' chamber President L K Malhotra said in a statement.
The market was overheated due to strong liquidity in the system on account of increasing FII inflows, and the diversion of funds to the IPO market has also somewhat contributed to the steep fall, he added.
The Indian capital market has, over the years, integrated with the global markets. The developments in the global markets have affected the investors' sentiments, which has led to the selling pressure and slide in the indices.
''However, the current fall in the market indices should not be a cause for concern and the investors should continue to make informed decisions about investments. The industry is confident and optimistic about the strong fundamentals and growth in the economy,'' said Dr Malhotra.
UNI PDT SR RK2139