FIIs no factor in Sensex fall: Chidambaram

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New Delhi, Mar 4: Finance Minister P Chidambaram today ruled out any check on withdrawals by the Foreign Institutional Investors, saying their presence in the Indian stock market was not sizeable enough to affect it.

Replying to a question on reasons for the recent fall in Sensex put up by BJP's Ms Sushma Swaraj, Mr Chidambaram said some of the factors that led to the fall was the sub-prime mortgage crisis in US, change in the monetary stance of developed countries, the expected US recession and the firming up of oil prices. Moreover, Yen carry trade, the policy measures on offshore derivative instruments by the SEBI, the impact of primary market issues, relative variations in emerging markets etc also affected the Sensex behaviour, he said.

Ms Swaraj while attributing the Sensex fall to massive withdrawal by FIIs had wanted to know whether the Government was mulling any check on such withdrawals.

FIIs' share in the Indian market was too small to warrant such action, Mr Chidambaram said.

''FIIs investment is capped for different sectors by SEBI, and there was no proposal to ban them, nor to put any check on withdrawals by them,'' he said.

 Mr Chidambaram said the authorities do not try to manage or control movement of stock indices. They have put in place a system and practices to promote a safe, transparent and efficient market and to protect market integrity. He said the Sensex moves up or down depending on the changing perceptions of investors--domestic and overseas, retail and institutional-- about the economy, the sector and the company.

''This perception is influenced by many factors including the macro-economic development, the growth potential of economy, policy credibility of the government, corporate performance, domestic and international events and market sentiments,'' he said.

The actual loss or gain to particular investors depend on their investment horizon, he said pointing out that while the Sensex declined by 7.4 per cent on January 21 last, it increased by 34.5 per cent during this fiscal on a point to point basis from the end of March 2007 to the end of February 2008.

UNI

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