Stock market reflecting worldwide developments: FM

[Sukumar]

New Delhi: Noting that some volatility is to be expected in the
bourses due to turbulence in global financial markets, finance
minister P. Chidambaram on Friday said the stock market is not the
sole indicator of India's economy.

"The stock market is reflecting worldwide developments. In fact, it is
really reflecting the developed economies as well as the Asian
economies," he said in a reply in Lok Sabha.

"But some volatility is to be expected especially when there is
turbulence in the international financial markets," the minister
said.

"The stock market is an important indicator, but we should not look at
the stock market as the sole indicator of India's economy,"
Chidambaram said.

He said the Sensex only captures the share price movement of 30 stocks
and the Nifty captures the share price movements of either 50 or 100
stocks.

He said the country has a well-established regulatory system in place
and it would ensure there is no excessive volatility in the market.

On the appreciation of the rupee, he said it is not solely
attributable to US recession.

"It is the result of a number of factors like our productivity gains
in India - both labour productivity and capital factor productivity,"
Chidambaram said.

He said the rupee has appreciated rather significantly against the US
dollar which he said is weakening for reasons which are relevant to
the US.

The rupee has not appreciated to the same extent against the Euro or
the Yen, Chidambaram added.

N.Sukumar
Research Analyst
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