FM statement soothens markets; advises calm

New Delhi, Jan 22 (UNI) Finance Minister P Chidambaram's statement asking the investors to maintain calm and the assurance that liquidity will not be a problem had a soothing effect on the bourses.

Mr Chidambaram told reporters in the afternoon that he has been assured by the Reserve Bank of India (RBI) and public sector banks that enough liquidity would be provided to brokers and market players.

''Liquidity will not be an issue,'' Mr Chidambaram said.

The benchmark sensex made a recovery after crashing by more than 12 per cent. The 30-share Sensex, which saw trading suspended for an hour after a fall of more than 10 per cent in the morning, had plunged further to 12.48 per cent at 15,400 levels after trading was resumed.

But the market recouped the losses in the session later in the day by gaining 1,322.43 points.

''We had anticipated the market to open on a downward trend and hit the circuit breaker. My advice to investors is to stay calm,'' Mr Chidambaram said.

Affirming to the fact of strong fundamentals, Mr Chidambaram said the economy is poised to grow at nine per cent. He said according to the Chairman of the Economic Advisory Council Dr C Rangarajan, the economy is slated to grow at 8.5 per cent in the next fiscal.

''The economy will grow this year at close to 9.0 per cent and even according to Dr Rangarajan's committee report it will grow 8.5 per cent next year,'' he added.

''Worries of the western world should not be allowed to overwhelmed us. Our economy is very different from some economies of developed countries. Our economy is a strong economy and the corporate sector is very strong,'' he said.

Mr Chidambaram was of the view that there was no ground for sentiments to be negative.

''RBI has stated that investments in pipeline are very strong, corporate profits are high, and corporates income tax is an all time high,'' he said.

When asked whether institutions would be advised to buy stocks to pep-up the market, Mr Chidambaram quipped, ''We are not advising institutions to do this or that. Institutions are good judge of what our evaluations are today.'' The Finance Minister noted that analysts and advisors have asked investors to stay calm.

''I am sure investors would take informed and mature decision and not give any room unwarranted apprehensions and market rumours,'' he said.

Meanwhile informed sources said the Finance Ministry was in constant touch with the Prime Minister Office and the Reserve Bank of India on the issue of stock market crash.

UNI GS MP AS1921