New Delhi: The stock market tumble on Monday doesn’t reflect any change in the fundamentals of the Indian economy and investors must not pay attention to rumours, the Government has 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," the Finance Ministry said in a statement after markets recorded its biggest fall today.
The government advised investors to take informed and responsible decisions and not to act on the basis of market rumours or any unwarranted apprehensions.
Prime Minister Manmohan Singh said he was confident the stock market would grow in an orderly manner despite Monday’s event. "Let me say orderly growth of the capital market is a priority concern for our government," Singh told reporters.
Shares tumbled almost 11 percent to a four-month intra-day low on Monday, suffering their biggest intra-day points fall ever on margin calls and foreign selling, before paring their losses to end down 7.4 percent.
The BSE Sensex fell by 1408.35 points or 7.41 per cent, while the NSE Nifty closed down 496.5 points or 8.7 per cent.
The Government said most Asian markets opened the year 2008 on a weak note with participants indulging in heavy selling. Sensex fell by 13.97 per cent this month, the statement said.
To substantiate the point that fundamentals of the economy are strong, it said banks have reported robust investment pipeline and high credit demand.
As trading came to a close, the Sensex made a marginal recovery, but was still down 1,408.35 points, or 7.41 percent, in what was the steepest closing fall since May 2004.
Earlier, the finance ministry also advised caution on the part of investors and said the fundamentals of the Indian economy were strong and that the steep fall in Indian indices was lower that those in other Asian economies.
"Today's market fall reflects the continuing uncertainties in the global economy and not any change in the fundamentals of Indian economy," said the statement, issued after the markets closed Monday.
"Investors should take informed and responsible decisions in the situation and not be led by market rumours or any unwarranted apprehensions."
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