Stock market meltdown reflects global uncertainities: FinMin

New Delhi, Jan 21 (UNI) The Finance Ministry today attributed the stock market crash to the continuing uncertainities in the global economy and added that the fundamentals of the economy remain strong.

In a statement, the Ministry said most of Asia opened the year 2008 on a weak note with heavy selling pressure seen in most markets.

Comparing the major Asian market indices as on January 2, 2008 with their closing today, it noted that the Straits Times has fallen by 14.75 per cent, Hang Sang by 13.58 per cent and the Nikkei down by 9.29 per cent. The corresponding figure for BSE Sensex is 13.97 per cent.

Today the BSE Sensex fell by 1408.35 points or 7.41 per cent and the NSE Nifty closed was down by 496.5 points or 8.7 per cent, the biggest intra day fall in the history of India.

The Ministry cited the just released Review of the Economy 2007-08 by the Economic Advisory Council of the Prime Minister which estimated the rate of growth of the GDP in 2007-08 at 8.9 per cent.

''Corporate profits as reflected in the third quarter 2007-08 results continue to be buoyant. Direct tax revenues have shown an increase of 42.8 per cent this financial year (April to December, 2007). Banks have reported that investments in the pipeline are robust and credit demand is high,'' it said.

''Thus, the fundamentals in the domestic economy are quite strong. Today's market fall reflects the continuing uncertainties in the global economy and not any change in the fundamentals of the Indian economy. Investors should take informed and responsible decisions in the situation and not be led by market rumours or any unwarranted apprehension,'' the statement said.

UNI GS SBA RN2004