Investors should take informed decisions: FM

Calling for market players to take "informed and matured" decisions, Finance Minister P Chidambaram on Tuesday sought to calm panicked investors after the Bombay Stock Exchange Sensex nosedived over 2,000 points in early Tuesday trade.

"I am sure investors will take informed and matured decisions and not give any room to unwarranted apprehensions and market rumours," Chidambaram told reporters after the BSE authorities suspended trading within minutes of witnessing a sharp plunge.

Initially the stock market seemed to respond favourably to Chidambaram's words, However, the downturn continued subsequently.

Tuesday's was the second intervention by the finance ministry to calm investors' nerves.

On Monday, after the Bombay Stock Exchange's Sensex fell over 1408 points, a late evening statement by the ministry had advised investors to take "informed and responsible decisions in the situation and not be led by market rumours or any unwarranted apprehensions.

The fundamentals in the domestic economy are quite strong. Tuesday's market fall reflects the continuing uncertainties in the global economy and not any change in the fundamentals of the Indian economy," the release had said.

On Tuesday, just before he left for an overseas tour, Chidambaram reiterated that the Indian economy is on a strong footing.

"Our economy is on a very different (level) from some economies of developed countries. There is no reason to allow the worries of the western world to overwhelm us. Ours is a strong economy and corporate sector is very strong," he said.

"We will grow at 9 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," he added.

Chidambaram also said that there is no liquidity crunch in the economy.

"I am assured by RBI and all the banks that enough liquidity will be provided to brokers and market players. Liquidity will not be an issue," he said.

Banks have reported that investments in the economy are running very high, as the demand for credit is strong, he added.

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 on Tuesday."