Pranab tells FIIs to remain optimistic on India story

Finance Minister Pranab Mukherjee today asked foreign institutional investors (FII) to remain optimistic on the India growth story and not get swayed by the temporary volatility in stock markets.

Mukherjee met a group of more than 30 Indian and FIIs here.

According to an official release, Mukherjee during the meeting urged "the institutional investors to remain optimistic and take a long-term view of the economy and its performance rather than being disturbed by the short-term statistics".

He said the next generation financial sector reforms have already been initiated, like the widening and deepening of the Indian securities markets.

The reform process includes liberalising the policy on foreign capital flows, strengthening the regulatory and other institutional architecture and reducing transaction cost in securities markets.

In the current year so far, FIIs have put in Rs 14,260 crore or over $3.2 billion in the Indian markets. However, a majority of the investment has been into debt instruments.

Of it, about Rs 315 crore came come into equities, while the remaining Rs 13,945 crore has been into debt.

Slower investment of FIIs into equities and also cautious views taken by the domestic institutional and retail investors have pulled down the stock market benchmark Sensex by over 2,000 points or 10% since January to 18,495.62 points.