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Market meltdown: Corrective steps must come soon, says India Inc

Mumbai: As the BSE Sensex crashed 1,624.51 points, India Inc on Monday said the policymakers in the country must ensure corrective measures at the earliest to rebuild investor confidence, both domestic and overseas, jolted by the biggest-ever plunge in the Indian markets.

The benchmark Sensex tanked 1,624.51 points to close at one-year low of 25,741.56 as stock markets globally went into a tailspin amid mounting worries over the impact of China’s slowing economy.

“The fall in Sensex affects confidence for investments. Anyway there have not been much investments in the last few months. You have to rebuild confidence of investors in the market,” CII President Sumit Mazumder told PTI.

The rupee also plunged to a two-year low of Rs 66.66.

“It will have severe repercussions on the sentiments of investors, both domestic as well as overseas. Corrective measures will have to be taken at the earliest by the RBI and government,” Assocham Secretary General D S Rawat said.

CII Past President Ajay Shriram termed the crash as a “reflection of global situation”.

On the rupee fall, he added that “exports are impacted already due to downturn in the global market. The rupee falling will benefit Indian exports. However, the imports will be affected badly”.

Meanwhile, Rawat said steps will have to be taken to “save India’s economy from dumping of goods by countries with whom we can signed free trade agreements”.

To soothe jittery nerves, Finance Minister Arun Jaitley earlier in the day said the government and the RBI were watching the situation and hoped that things would settle down once the transient impact is over.

Expressing confidence in the government’s role, CII’s Mazumder said, “I do believe there will be steps taken… and there will be a correction in the market. I see this as a temporary phase.”

The BSE index resumed the day sharply lower in line with weak global cues and remained under pressure throughout the day as selling intensified. It fell below the 26,000-mark as it ended with a record fall of 1,624.51 points, or 5.94% at 25,741.56, its lowest closing since August 11, 2014.

Blaming global factors Assocham said, “But for depleting crude oil prices, things would have been difficult for the Indian economy. The global factors are again going to play a key role and it is testing time for our financial institutions.”