New Delhi: Finance Minister P Chidambaram said on Tuesday calm had returned to the country's stock markets after a major slide in the last few days and he urged genuine investors to stay invested.
India's benchmark BSE index shed 14 per cent in three days to the start of this week, with a brief intra-day loss of 10 per cent on Monday, which brought trading to a temporary halt.
The market then rebounded 3.25 per cent on Tuesday. "Since this morning calm and order appear to have returned to the market," Chidambaram said. The country's two major stock exchanges had reported that all market players had met their payment obligations, he said.
"The system stood the test of volatility and the markets were able to complete settlement of funds and securities smoothly ... My advice to genuine long-term investors is to stay invested."
He said it was the Government and regulator's responsibility to ensure market movements were orderly and they would take "necessary steps from time to time" to ensure the capital market remained well regulated.
He attributed a rise in share prices in the last two years to the "sound Indian growth story" and capital market reforms.
The Indian economy, Asia's third largest, is estimated to have grown 8.1 per cent in the year to March 2006 and has expanded at an average 8 percent for the last three years.
Foreign investors have put a net $3.5 billion in Indian stocks so far this year after a record $10.7 billion in 2005 and the main index hit a record high on May 11.
Chidambaram said the fall in Indian shares was due to various factors such as a decline in metal prices and equity markets around the world and hardening of interest rates.
"The fall got exacerbated on Monday presumably on the inability of some traders who were highly leveraged, to meet margin calls within time," he added.
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