Indian markets open strong after pep talk by Chidambaram (Lead)October 13th, 2008 - 12:09 pm ICT by IANS
Mumbai/New Delhi, Oct 13 (IANS) Indian equities opened strong and moved up further on global cues, as Finance Minister P. Chidambaram said the fundamentals of the Indian economy remained strong, minutes before the opening bell.“This is a time of uncertainty. Yet in a time of uncertainty, some facts cannot and ought not to be ignored,” Chidambaram told a hurriedly-convened press conference in New Delhi, adding that the Indian economy continued to grow at a satisfactory pace.
“Stock market indices are important indicators, but not the only indicators,” he said, while emphasising that the Indian economy has been predicted to grow at a robust pace, the investment rate was high and tax collections were on the rise.
He said the main problem in the country was of liquidity and that the same will be addressed both with fiscal and monetary measures. He said the recent cuts announced by the central bank in the cash reserve ratio, or the minimum cash banks have to maintain against deposits, was a step in that direction.
The observations by the finance minister lifted the market mood, resulting in the sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opening at 10,817.68 points, as against the previous close at 10,527.85.
Some 15 minutes into trading, the key index was ruling at 11,005.32 points, with a gain of 477.47 points, or 4.54 percent, over the previous close. All the 30 shares that go into the basket of Sensex shares were trading in the green.
The index had finished the week’s trading last Friday at 10,527.85 points, down 1,998.47 points or 15.95 percent over its close the previous Friday at 12,526.32 points.
Credit rating agency Crisil estimated Indian stockholders saw investments of over Rs.2.3 trillion (over $50 billion) being wiped off in September, while another estimate said top 10 Indian companies lost $1.23 trillion (over $25 billion) in market capitalisation last week.
According to the finance minister, some proactive steps will be taken once an expert panel set up by him to look into the financial turmoil, under Finance Secretary Arun Ramanathan, submits its report.
The expert panel, with members from financial regulators, mutual funds, investment banking companies and commercial banks, will be meeting later Monday to take stock of the situation.