By IANS
New Delhi/Mumbai : Investors should stay calm in the face of steep falls in stock markets because the fundamentals of the country’s economy remained strong, India’s Finance Minister P. Chidambaram said Tuesday, even as distressed investors crowded the street outside the Bombay Stock Exchange.
“The crash does not affect long-term sentiment and enough liquidity will be provided. We should not be bothered by the West’s economy,” Chidramabaram told reporters after trading was suspended for an hour at the Bombay Stock Exchange.
The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) fell by 2,029.05 points, down 11.53 percent, minutes after trading began. The Sensex opened at 16,884.09 points and hit a low of 15,576.30 in early trade, prompting an automatic halt in trading at BSE.
The broader 50-share S&P CNX Nifty index of the National Stock Exchange (NSE) also shed 630.45 points in early trades, down 12.10 percent at 4,578.35 points, compared to the previous close of 5,208.80 points.
An automatic halt is triggered if shares fall by more than 10 percent during a trading session.
“We had anticipated the market to open on a downward trend and hit the circuit breaker. My advice to investors is to stay calm,” the finance minister said.
“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,” he emphasised.
However, the scene in front of Jeejebhoy Tower, which houses the BSE, was of complete chaos with retail investors and shareholders crowding the street and hurling abuse.
“There was some problem in the morning as soon as the market opened but everything is under control now,” Deputy Commissioner of Police Brijesh Singh told IANS.
Agitated investors and shareholders were demanding the removal of the statue of the bull outside the BSE building.
Singh said police have been deployed outside the building, as the protestors have not yet dispersed.
Trading has, however, resumed at both BSE and NSE. Both the Sensex and Nifty recovered somewhat early Tuesday afternoon, but were still down more than 5 and 8 percent, respectively, over the previous day’s close.