Stating that enough liquidity would be provided to the market players, Mr Chidambaram, averred that the Reserve Bank of India and all the other banks have assured that liquidity to the brokers will not be an issue.”
Expressing confidence that investors will return to the stock markets, Mr Chidambaram sought to allay investors fears observing “market analysts and advisers have counselled investors to stay calm. I am sure investors will take informed and matured decisions. They should not give any room to unwarranted apprehensions and market rumours.”

Corporate profits

Pointing out that “worries of western world should not be allowed to overwhelm us,” the finance minister said “our economy is very different from some economies of the developed world. Our economy is a strong economy and corporate sector is very strong.” Observing that there is no ground for sentiments to be negative in the long run as fundamentals of the Indian economy are strong, Mr Chidambaram reiterated that the Indian economy will grow at nine per cent this fiscal.”

In this regard, he explained that the banks have reported that investments in the economy are running very high as the demand for credit is strong, adding “investment in pipeline is also strong. Corporate profits are high and corporate income tax is at an all-time high.”

Queried whether the government has advised domestic institutions to intervene and buy stocks Mr Chidambaram shot back “the government is not in the business of advising institutions to do this or that. Institutions are good judge of what are valuations today.”

Earlier, Mr Chidambaram, is understood to have briefed Prime Minister Manmohan Singh about the developments in the stock market. In his 15-minute long talks with Prime Minister Manmohan Singh, he was understood to have explained the vigilance and monitoring being maintained by market-regulator Securities & Exchange Board of India to safeguard interests of investors including small time retail investors, sources told Deccan Herald.
Incidentally, the finance minister’s statement on the economy’s health appeared to have made a positive impact on investor sentiment as the stock market restricted losses to 875.41 at end of closing of Tuesday’s trading.