Finance Minister Pranab Mukherjee on Friday sought to calm jittery investors, saying Indian markets were performing better than other Asian and European bourses, despite coming under the short-term impact of a bearish phase in global markets.
Mukherjee exuded confidence that the current global turmoil presented an attractive opportunity for Indian markets, since long-term foreign funds are likely to increase their exposure.
The finance minister issued a statement in this regard after reviewing the global situation with the Reserve Bank of India Governor D Subbarao and Prime Minister's Economic Advisory Council Chairman C Rangarajan. Both Subbarao and Rangarajan felt the government should wait and watch the global situation and refrain from any panic reaction, officials said.
“Compared to the sharp fall in the indices in the US and Europe yesterday, Indian indices have weathered any contagion effect. On Friday, Indian markets contracted 1.9 per cent, only around one-third of the fall seen in the US and European markets,” Mukherjee said. Compared to other Asian markets, India’s performance has been better, he said, adding, “Some of the major Asian markets saw losses of four-six per cent.”
The finance minister also said the current crisis can, however, be expected to encourage an increase in the equity exposure by foreign pension funds and other long-term institutional investors.