New Delhi: With stock markets tanking to 15-month low on economic woes of the West, the government on Friday said Indian bourses are not as badly hit as others in Asia, and the country is well positioned to absorb the potential foreign fund inflows.
Finance minister Pranab Mukherjee discussed the macro-economic situation in the wake of the debt crisis in the US and Europe with Reserve Bank of India (RBI) governor D. Subbarao and Prime Minister’s economic advisory council (PMEAC) chairman C. Rangarajan.
“As the advanced economies grapple with their problems, India is better positioned than most other nations to meet its problems,” the finance ministry said in a statement.
It said the crisis in the western world presents an opportunity for India to attract investments from foreign funds.
“The present crisis can be expected to encourage increase in the equity exposure by foreign pension funds and other long term institutional investors. India is well-positioned to capture this flow,” the statement added.
The hefty outflow of foreign funds saw the benchmark Sensex of the Bombay Stock Exchange dipping below the 16,000 points level during the day on panic selling amid weak global trends.
The Sensex plunged by 481.01 points in intra-day trade on Friday, but recovered partly to close nearly 328 points lower at 16,141.67 points. On the other hand, gold prices touched a record Rs28,000 per 10 grams.
“In comparison to the sharp fall in the indices in US and Europe on Thursday, the Indian indices have weathered any contagion effect,” the statement said.
So far this month, the foreign investors have pulled out a net Rs1,028.50 crore (about $227 milion) from Indian markets.