FM says weak rupee, FII withdrawals behind market crash

New Delhi: Finance Minister Pranab Mukherjee on Wednesday said that withdrawals by foreign institutional investors led to the market crash. Mukherjee’s comments came after the markets plunged to near two-year lows earlier in the day.The Sensex had plunged nearly 600 points while the Nifty had given up up over 160 points. The Sensex and Nifty were among the worst performers among all Asian indices, falling nearly 3 per cent.Analysts also attributed the panic selloff to liquidation by foreign funds. Fears of global slowdown also led to selling pressure across global equities.Speaking about the weakness in the rupee, Mukherjee said the situation is unlikely to improve till the Euro zone stabilized.Here is the complete text of the statement made by the Finance Minister on the market crash:INDIA’S GROWTH AND FUNDAMENTALS ARE STRONG AND  LOOK MORE ATTRACTIVE IN A WORLD CONFRONTING PROBLEMS; RBI IS CLOSELY MONITORING THE RUPEE SITUATION AND WILL DO THE NEEDFUL AS REQUIRED, SAYS FM.The Union Finance Minister Pranab Mukherjee said that RBI is closely monitoring the current rupee situation and he is sure that RBI will do the needful, as required. The Finance Minister further said that he would like to add that despite global uncertainty, FII Investments have been in the positive territory in October (USD 634 million) and November as of yesterday (USD 213 million). Mukherjee said that India’s growth and fundamentals are strong and they look more attractive in a world confronting problems.Mukherjee was referring to the benchmark indices which lost 2.5 per cent as of 2 PM on Wednesday as overseas markets declined on concerns over US' third quarter growth and high yields on Spanish bonds. He said that in India, a day ahead of the expiry of the November futures contract, trading remains choppy. Regarding the rupee, Mukherjee said that the volatility in the Rupee is also keeping investors nervous, though on Wednesday the rupee recovered from a low of 52.73 to trade at 52.12 per dollar.Mukherjee said that against an expectation of a more modest revision, the third quarter US GDP growth was revised downward to 2.0 per cent from the advance estimate of 2.5 per cent. As a result, the US markets closed lower by around 0.5 per cent on Tuesday. Asian stocks also fell in the range of 2 - 2.5 per cent, after a mining tax was approved in Australia’s lower house of Parliament, along with lingering concerns on Europe.