Date:18/05/2004 URL: http://www.thehindubusinessline.com/2004/05/18/stories/2004051803200600.htm

Back Chambers not unduly perturbed

Our Bureau

New Delhi , May 17

THE volatile fluctuations witnessed in the Indian market in the past couple of days does not seem have India Inc unduly perturbed. The Director-General (Designate) of the Confederation of Indian Industry (CII), Mr N. Srinivasan, felt what was being witnessed in the Indian stock markets was part of a global phenomenon.

The CII official added that the huge movement in stocks was also because of over-reaction.

"The Indian stock market should be seen in the over all context of the sluggishness seen in the Asian markets today where most of the markets are down. This is also partly contributing to the decline in the Indian market," Mr Srinivasan said.

Terming the current stock market movement as a "bit of a over-reaction" especially as the Government had not yet been formed, Mr Srinivasan said that the economic prospects were good, fundamentals strong and the corporate sector was doing well.

The President of the Federation of Indian Chambers of Commerce and Industry (FICCI), Mr Y.K. Modi, added that the market crash today was mainly due "to uncertainty in the making of the Government policies."

The FICCI President felt that some statements made by those going to be part of the new Government have also influenced the sentiments, he said, adding that "once the position is clearly stated, things should change."

On what is the expectation from the common minimum programme of the Government he said, "we hope it should be in the right direction."

Similarly, the President of the Associated Chambers of Commerce and Industry of India (Assocham), Mr Mahendra K. Sanghi, urged the coalition partners of the new Government to practice "restraint" while reacting to important economic issues, since views of individuals may not be shared by the incoming Government.

The Assocham President termed the reactions of some coalition partners as "unfortunate." Expressing concern over the bloodbath on the bourses, Mr Sanghi said that the chamber strongly believes that there were no reasons for such a panic reaction when fundamentals of the economy are strong and future economic growth indicators are bright. The Chamber President urged the Securities and Exchange Board of India (SEBI) to watch the situation closely and take stringent measures, if necessary, to correct the situation.

The President of the PHD Chamber of Commerce and Industry, Mr Ravi Wig, felt that the sharp fall in the Sensex was totally "uncalled for" and added that the markets should wait for the new Government to state its policies before panicking.