India’s Economy Can Withstand Global ‘Negative Sentiments,’ Mukherjee Says
By Unni Krishnan - Aug 7, 2011
India will achieve “appreciable”growth this year and the nation’s financial markets can weather“negative sentiments” spreading across the world, Finance Minister Pranab Mukherjee said.
“Our growth story is intact and the fundamentals are strong,” Mukherjee told businessmen in New Delhi yesterday.“Our markets have the capacity to withstand the negative sentiments affecting the external world.”
Indian stocks tumbled, the rupee fell and bonds climbed Aug. 5 on concern the U.S. economy is stalling and Europe’s debt crisis is worsening. After the markets closed, Standard & Poor’scut the U.S.’s AAA rating for the first time. Mukherjee said India’s challenge is to tame inflation, contrasting with nations from Japan to Switzerland which are trying to support expansion.
“We witnessed some recovery already and this is testimony to our capacity for resilience,” Mukherjee said, referring to the Indian stock, currency and bond markets.
The Bombay Stock Exchange Sensitive Index, or Sensex, lost 387.31, or 2.2 percent, to 17,305.87, the lowest since June 11, 2010, in Mumbai on Aug. 5, after declining as much as 4 percent earlier in the day.
The rupee weakened 0.4 percent to 44.74 per dollar on Aug. 5. It fell to 44.85 earlier, the weakest level since June 29. The yield on the 7.8 percent bond due April 2021 slid 9 basis points, or 0.9 percentage point, to 8.31 percent.
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