Investors lose trillions; FM says don't panic

Finance Minister P Chidambaram sought to calm investors panicked by a meltdown of over 2,000 points on Tuesday morning leading to suspension of trading, saying that enough liquidity would be provided to market players.
Investors lost over Rs 6 lakh crore (Rs 6 trillion) within minutes of the opening of the Bombay Stock Exchange on Tuesday.
"I am assured by the Reserve Bank of India [Get Quote] and all the banks that enough liquidity will be provided to brokers and market players. Liquidity will not be an issue," Chidambaram said.
Ahead to his visit to Davos for participating in the World Economic Forum, Chidambaram exuded confidence that investors would return to market as fundamentals of the economy were strong.
"Worries of western world should not be allowed to overwhelm us... our economy is very different from some economies of developed countries. Our economy is a strong economy and corporate sector is very strong," he said after the exchange authorities suspended trading within minutes after the bourses witnessed a sharp plunge.
Even after the market opened at 1100 hours, the sentiments were heavily toward sell and within an hour the BSE Sensex was reading down by over 2200 points.
To a query, Chidambaram said there is no ground for sentiments to be negative in the long run as fundamentals of Indian economy are strong.
"We will grow at nine per cent this year. Even Rangarajan Committee (Prime Minister's Economic Advisory Council) has said we will grow at 8.5 per cent next year," the finance minister said.
Banks have reported that investments in the economy are running very high as the demand for credit is strong, he said.
"RBI has stated that investment in pipeline is also strong. Fundamentals (of the economy) are very sound. Corporate profits are high and corporate income tax is at an all-time high," he said.
When asked whether institutions would be advised to buy stocks at this moment, Chidambaram said: "We are not advising institutions to do this or that. Institutions are good judge of what are valuations today."
However, he said analysts and advisers have advised investors to stay calm. "I am sure investors will take informed and matured decisions and not give any room to unwarranted apprehensions and market rumours," he added.
In the morning, stock market suspended trading for an hour after the benchmark Sensex hit the lower circuit limit.
Source: http://www.rediff.com/money/2008/jan/22fm.htm