Mkt crash temporary, stability soon: Chambers

Industry associations today described the stock market crash as "a temporary phenomenon" and said it would stabilise soon.

Federation of Indian Chambers of Commerce and Industry (Ficci) said the fall had nothing to do directly with the fundamentals of the Indian economy.

"The fall in the stock market appears to be a reflection of the weakening sentiment in major markets across the globe. The Indian economy and the performance of the corporate sector remains robust, and the Indian market should certainly reflect the underlying strengths of the Indian economy in the long run ," a Ficci statement said.

Venugopal N Dhoot, president, Associated Chambers of Commerce and Industry (Assocham), said: "Erosion in stock market valuations should be taken as short-term reaction to the global events and has limited effect on the real growth of the economy."

Dhoot added that investments across various sectors like power, steel, cement, transportation, real estate, telecom and auto would keep the growth momentum of the economy.

While exhorting investors not to panic, L K Malhotra, president, PHD Chamber of Commerce and Industry (PHDCCI), said the steep fall seems to be a technical correction that was long overdue and has brought the market to a more realistic level.

"The market was overheated due to strong liquidity in the system on account of increasing inflows from foreign institutional investors," Malhotra said.

Dhoot predicted that the Sensex would move up to a high of 24,000 points in 2008. Earlier, in a survey, Ficci had said that with an expected gross domestic product (GDP) growth rate of 9% in the coming years, the Sensex is expected to remain bullish and touch the 25,000-mark in the next two years.