SEBI’s measure necessary, good: Chidambaram

New Delhi, (IANS) Finance Minister P. Chidambaram Wednesday termed market regulator SEBI’s decision to clamp down on participatory notes as “necessary and good”, even as India’s key index plummeted over 1,700 points in the early hours of trading.

“The fundamentals are still strong. Steps taken by SEBI (Securities and Exchange Board of India) are necessary measures; it is a good measure for growth. Foreign inflows are very copious and these are indeed a factor that strengthens the rupee,” the minister told reporters here soon after news came in of the market crash.

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“SEBI is only trying to moderate the capital inflows. The initial sense of alarm will quieten as the day progresses,” Chidambaram added.

He also indicated the moves proposed by SEBI would become regulation on Oct 25.

He also urged market commentators not to be alarmist, saying there was no need to panic.

Following the minister’s remarks, the index recovered a bit when the markets reopened at 10.55 a.m., with the Sensex reaching 18,135.09 points.

The Sensex Wednesday crashed by 1,743.96 points to plunge to 17,307.90 and the Nifty dipped by 9.25 percent to fall to 5,143.90. The crash also led to the markets being closed for an hour till 10.55 a.m.

This comes two days after the Sensex had climbed to an all time high of 19,000 Monday.