Govt brings peace to stock exchanges

New Delhi, May 22 (UNI) The government's all out bid to stem the sharp slide in the stock markets by announcing that Banks have been advised to provide ample liquidity to to meet margin money requirements bore fruit with markets bouncing back.

In its worst intra-day volatility, the BSE Sensex tumbled 1,111.78 points to a low of 9,826.91, while hitting a 10 per cent lower circuit.

Finance Minister P Chidambaram and SEBI Chairman M Damdodaran's appeals to investors not to panic as there was no systematic problem with the markets and fundamentals remained strong had a soothing effect on the Bourses and the nightmare of the black Monday was averted. After the black Monday markets recovered only gradually.

The markets started recovering moving up by 654.8 points from the intra-day low and closed only 454.84 points lower with the index at 10,481.77.

Mr Chidambaram was at pains to explain that many of the FIIs were long-term investors and the 'India growth story' was a formidable one with continued buoyancy in the GDP growth rate, manufacturing growth rate of nine per cent plus and prospects of good agricultural growth resulting from expectations of a bountiful monsoon.

Mr Damodaran, who was in Delhi, did not meet Mr Chidambaram as was the speculation, but sources said he had come to address a programme on Doordarshan.

Views on the market continued to differ, with many wondering how deep the pit was and others saying that markets had bottomed out.

Investment Guru Marc Faber felt that market evaluations were over- stretched leading to more than 20 per cent correction. Others felt this was a God sent opportunity for investors with markets being at mouth watering levels. At the end of it all, the day ended with rays of hope.

UNI GS ARB DB2011