Indian financial markets are in turmoil as a result of external factors and they should soon settle down, Finance Minister Arun Jaitley said on Monday.
He also said that the government and RBI were watching the situation and hoped that things will stabilise once the transient impact is over.
"There has been for the last few days a great amount of turbulence which was being caused in the global markets. Obviously that turbulence has had impact on Indian market itself. The factors responsible for this are entirely external.
"There is not a single domestic factor in India which has either contributed to it or added to it. These are external factors. I have not the least doubt that this turbulence is transient and temporary in nature. The markets will settle down", he said.
Jaitley, who was talking to reporters on the sidelines of an event in New Delhi, said that government and the RBI were closely watching the situation. He also underlined the need for strengthening the economy to deal with the impact of global developments.
The stock markets witnessed a bloodbath on Monday with the benchmark BSE Sensex crashing over 1,500 points, biggest in seven and a half years, amid a global rout. The BSE 30-share index was trading 1,435 points down while the broader Nifty index of NSE was down 478 points at 3pm. Both the indices were down more than 5% in the afternoon trade. The market witnessed all-round heavy selling across realty, power, oil&gas, bankex, auto, metal, capital goods and IT sectors.
Jaitley also said that all the concerned authorities including the government and Reserve Bank "are watching the situation very closely and conscious of the responsibility, as what is to be done."
As far as India is concerned, the minister said "our response at this stage is very clear. We have to strengthen our own economy. We have embarked upon a path for one and quarter years... even in the midst of global slowdown India should emerge as one of the fastest growing economies in the world."
Observing that the domestic indicators were extremely positive, Jaitley said, "once these transient trends are over, markets particularly in India will settle down... they will restore back."
(With inputs from PTI)