FII pullout, weak rupee responsible for market crash:Pranab

During the intra-day trade, the BSE Sensex crashed by 587 points, but recovered later

PTI | November 23, 2011



Indian Finance Minister Pranab Mukherjee Wednesday attributed the stock market crash to withdrawal of funds by foreign investors and depreciation of the rupee.

"Markets have crashed because of continuous withdrawal of (funds by) FIIs. There is still uncertainty prevailing in the Eurozone. Rupee depreciation also has adverse impact. All these cumulative effects are there," he told reporters here.

He said this while responding to questions on sharp plunge in the stock markets. During the intra-day trade, the BSE Sensex crashed by 587 points, but recovered later.

Value of the Indian Rupee had touched an all-time low of 52.73 against the US dollar yesterday.

Foreign Institutional Investors (FIIs) have withdrawn Rs 2,352 crore from the equity market, between November 16 and November 22 this year, adding to the woes of stock markets.

The BSE benchmark Sensex tumbled by 587 points in the first half of trade Wedday, dipping below the 15,500-mark at mid-session, on account of heavy selling.

The wide-based National Stock Exchange Nifty index was also down by 171.40 points at 4,640.95 at 1230 hours.

Besides other things, fresh concerns about the health of the global economy, following downward revision of the US growth rate in the third quarter of 2011, also dampened confidence of investors.

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