As Indian equities bounced back in line with the uptick in global stock prices, the Finance Minister, Mr Pranab Mukherjee, today said that confidence was returning to the Indian stock markets and hoped that it would stabilise in the next few days.

Global stock markets rose today after the US Federal Reserve pledged to keep interest rates near zero for at least two years.

“One thing is certain that confidence has come back in respect of Indian markets and in a couple of days it will stabilise,” Mr Mukherjee told reporters outside Parliament on Wednesday.

He also said that the Finance Ministry and the Reserve Bank of India were working in close cooperation for stabilising the Indian markets and that there would be no dearth of liquidity and foreign exchange.

Indian stock markets took a big hit on Monday and Tuesday after credit rating agency Standard & Poor's downgraded the US sovereign rating from ‘AAA' to ‘AA+'. While the benchmark Sensex tanked 315.69 points on Monday, this 30-share index further declined by 132.27 points on Tuesday to close at 16,857.91.

Besides the US Federal Reserve pledge to keep interest rates near zero for the next two years, some aggressive buying by domestic institutional investors (DIIs) over the last few days helped support Indian equities.

In the last three trading sessions including Wednesday, DIIs were net buyers to the tune of Rs 3,000 crore.

The foreign institutional investors (FIIs) were net sellers of about Rs 3,500 crore in aggregate on Monday and Tuesday, but were net buyers of Indian equities to the tune of Rs 153 crore on Wednesday.

> krsrivats@thehindu.co.in

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