The government on Wednesday asserted that India's growth and fundamentals are strong and attributed thebloodbath in the stock markets to global factors.
"India's growth fundamentals are strong and they look more attractive in a world (which is ) confronting problems," Finance Minister Pranab Mukherjee said, adding that foreign institutional investors' investments have been in the positive territory in October and November.
Mukherjee's statement comes in the backdrop of a sharp decline in Indian stock markets.
The BSE benchmark Sensex on Thursday crashed 587 points in intra-day trade, before recovering to close 365 points lower at 15,699.97.
Earlier in the day, he had said that continuous withdrawal of funds by foreign investors and depreciation of the rupee are the major factors for crash of stock markets.
"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 said.
In the past six trading sessions, foreign institutional investors have withdrawn $623 million (Rs 3,214 crore) from the equity markets.
During October and till November 22, FIIs have invested $634 million and $214 million, respectively.
However, the FIIs on Wednesday pulled out over $160 million from stock markets.
Referring to the decline in the value of rupee, he said, "RBI is closely monitoring the situation and will do the needful as required."
Value of the Indian Rupee had touched an all-time low of 52.73 against the dollar on Tuesday, but recovered on Wednesday to trade around 52.12 per dollar.
Mukherjee further said that the overseas markets declined on concerns over US third quarter growth and high yields on Spanish bonds.
Most of the overseas indices were in the red on Wednesday as concerns over the health of the global economy, and downward revision of the US growth rate in the third quarter of 2011.
He said that in India, day ahead of the expiry of the November contract, trading remained choppy.
The wide-based National Stock Exchange's barometer Nifty closed 2.2 per cent down at 4,706.45 points.
