NEW DELHI: Union Finance Minister P. Chidambaram on Tuesday said India was one of the "best performing emerging markets" in the world and advised investors to "stay invested" as genuine retail long-term investors were not affected by margin pressure or by sudden fall recently in the stock markets.

Making a statement in the Rajya Sabha on `Recent Developments in the Stock Market,' the Minister said the Government and Securities and Exchange Board of India (SEBI), besides other regulators, would take necessary steps from time to time to ensure that the capital market remained well regulated.

The Bhartiya Janata Party staged a walkout after Deputy Chairman K. Rahman Khan disallowed any clarifications on the statement.

Mr. Chidambaram informed the House that the data from the markets received on Monday confirmed that mutual funds had been net buyers. Even Foreign Institutional Investors (FIIs) had been overall net buyers with large purchases in the derivatives market. Genuine retail long-term investors were not affected either by margin pressure or by the sudden fall. In order to enable highly leveraged participants to meet margin requirements banks have provided adequate liquidity. "Therefore, in view of the fact that calm has returned to the market my advice to genuine long-term investors is to stay invested."

Assuring the House that the responsibility of the Government and the regulator was to ensure that market movements are orderly, he said: "We must accept the fact that markets will rise and markets will fall in response to developments. That is a natural phenomenon. The secular rise in India in the last two years is attributable to the sound India growth story. India growth story remains intact."

He said for some time now experts had been suggesting that a technical correction of the market was unavoidable. The correction, however, happened to be more than expected, and somewhat disorderly, on account of various factors including the decline in global markets, the decline in metal prices, the hardening of interest rates and the comparative attractiveness of other emerging stock markets. "The fall got exacerbated on Monday presumably on the inability of some traders who were highly leveraged, to meet margin calls within time."

He said the events over the last week in the global markets, especially movements in the commodity markets, had brought sharp volatility to the stock markets in many emerging markets. Markets both in the developed world as well as in the emerging economies had seen sharp corrections. There has been a decline in Russia, China, Korea, Brazil and Indonesia. India also saw considerable volatility as part of these global events. The last two days of the previous week saw a fairly sharp correction in the stock markets in India.

The Minister informed the House that the Sensex which was at 4,505 on May 17, 2004 recorded a secular rise to reach an all time high of 12,612 on May 10, 2006. In fact even at Monday's level compared to May 17, 2004 there was an increase of 133 per cent.

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