Wednesday, November 23, 2011

FII withdrawal, weak rupee responsible for market crash: Pranab

New Delhi, November 23, 2011(Tehelkanews)

Finance Minister Pranab Mukherjee on Wednesday attributed the stock market crash to withdrawal of funds by foreign investors and depreciation of the rupee.

"Markets have crashed because of continuous withdrawal of (funds by) FIIs. There is still uncertainty prevailing in the eurozone. Rupee depreciation also has adverse impact. All these cumulative effects are there," he told reporters in New Delhi.

He said this while responding to questions on sharp plunge in the stock markets. During the intra-day trade, the BSE Sensex crashed by 587 points, but recovered later.

Value of the Indian Rupee had touched an all-time low of 52.73 against the U.S. dollar on Tuesday.

Foreign Institutional Investors have withdrawn Rs. 2,352 crore from the equity market, between November 16 and November 22, 2011, adding to the woes of stock markets.

The BSE benchmark Sensex tumbled by 587 points in the first half of trade on Tuesday, dipping below the 15,500-mark at mid-session, on account of heavy selling.

The wide-based National Stock Exchange Nifty index was also down by 171.40 points at 4,640.95 at 12.30 p.m.

Besides other things, fresh concerns about the health of the global economy, following downward revision of the U.S. growth rate in the third quarter of 2011, also dampened confidence of investors.

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