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PM concerned over fall in Sensex

PM's economic council attributes the downslide to global and domestic issues, including hike in fuel prices.

india Updated: Jun 08, 2006 21:17 IST

Prime Minister Manmohan Singh on Thursday expressed concern over the plummeting stock markets, with his Economic Advisory Council attributing the downslide to both global development as well as domestic issues, including hike in fuel prices.

Talking to reporters after the council's meeting, its chairman C Rangarajan said: "The council was of the view that the bear hammering was the result of both global factors as well as domestic issues including petroleum price hike."

The stock market today recorded its steepest fall this month, with the BSE Sensitive Index shedding 461 points, taking the cumulative fall since Monday to 1,155 points.

He, however, sounded optimistic saying "My feeling is that the stock market is reaching bottom."

With retail investors panicking, the mutual funds, which were earlier buying in the market, have also come under selling pressures, he said, adding that prior to fuel price rise global factors were exerting pressure on the stock markets.

"Earlier, FIIs were selling and mutual funds were buying, but they have now come under selling pressures as retail investors panicked," Rangarajan said.

On the issue of auto fuel price rise, Rangarajan, the former RBI governor, said this subject should not be politicised as economic compulsions and necessities were of prime importance, while saying no to a rollback in hike in prices of petrol and diesel announced on Monday.