Stock market plunge triggered by uninformed reporting: FM

New Delhi, May 18 (UNI) Finance Minister P Chidambaram today described the historic slide in the stock markets as a ''correction'' and attributed it to a combination of factors-- ''uninformed'' reporting, sharp fall in global commodity prices and the decision of the US Fed to hike interest rates.

''I would put it as a correction provoked by reasons which are quite understandable,'' Mr Chidambaram told reporters here.

The stock market closed trading after a fall of 826 points on reports of withdrawal by FIIs. The BSE index ended nearly 7 per cent down today, registering its biggest one- day fall in terms of points. Weak Asian markets added to the gloom at the bourses.

Commodity-related stocks recorded the biggest losses.

Mr Chidambaram characterised the steep dip as a ''manufactured crisis'', and wooed Foreign Institutional Investor(FII) back into the bourses, clarifying that no FII has been assessed as a trader for purposes of taxation.

The Finance Minister said the crash was triggered as a result of ''uninformed reporting'', but added that other factors contributed to the decline.

''No FII has been assessed as a trader as they are investors and this is a manufactured crisis based on uninformed reporting. There is a lesson for everybody. Uninformed reporting and reaction to uninformed reporting is not a desirable thing.'' Earlier in the day, Mr Chidambaram sought to play down the fall by saying that ''every movement and swing of the market did not warrant a comment''.

The BSE index closed at 11936.54.

''All metal prices are down, there is some impact of increase in local cement prices, and the Fed rate decision. All the markets are doing the same.'' In Japan, the Nikkei slid 1.99 per cent, extending losses into a sixth session, while bourses in Singapore and Hong Kong also moved Southwards.

The US Federal on May 10 raised the benchmark federal fund rate by 0.25 percentage points for the 16th straight time to 5 per cent, dampening the animal spirits of the stock market players.

The government late last night said it planned guidelines that would help distinguish between investors and stock traders so as to tax them differently, raising concerns foreign fund players, which have pumped in 0.2 billion into the stock markets.

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