FM advises investors not to panic, markets soar

"Our banks are ready and willing to provide credit. Suitable advisories are being issued to the banks. We will respond swiftly according to the needs of the situation.

"We are working on measures that will infuse liquidity, make credit intermediation smoother and increase the confidence of depositors and investors. We hope to be able to announce them shortly," he said.

After the week-end mayhem in which the market tanked 800 points, Chidambaram went live on television channels expecting the stock market to take its cue from the "positive developments" of the Australian market and three of the East Asian capital markets opening on a 'bright note' this morning.

"Investors must take informed decisions. Before you sell, you must remember that for every seller there is a buyer. You must ask yourself why the buyer is buying in these times of perceived uncertainty and, therefore, ask yourself the further question whether there is a need to act in haste or in panic. In my view, there is no reason at all to act in haste or to give room for panic," he said.

Mentioning that already Rs 60,000 crore liquidity has been infused into the financial system by RBI's measures and that Rs 91,500 crore liquidity adjustment facility exists, Chidambaram said the government, RBI and SEBI were watching the situation carefully and coordinating their actions.

TEXT OF FINANCE MINISTER P CHIDAMBARAM'S STATEMENT

This is a time of uncertainty. Yet, even in a time of uncertainty there are some facts that cannot be and ought not to be ignored.

The Indian economy continues to grow at a satisfactory rate. As recently as last week, the IMFs research department (Oliver Blanchard) noted that "the Indian economy would continue to do well despite the impact of the global liquidity crunch." As per projections made by the IMF, India is expected to post a GDP growth of 7.9 per cent during the current fiscal year.

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