Global weakening affecting Indian stock markets: FM

NEW DELHI: As the market appears to be caught in a head-spinning volatility, Finance Minister P Chidambaram said net selling by FIIs was temporary and attributed the bear phase on Dalal Street to a weak global trend.

"Global markets appear to be volatile. These volatilities are also reflected in stock exchanges in Indian market," he told reporters.

Sensex, the market bellwether, today dropped 388.02 points to 10,398.61, while Nifty closed down 114.25 at 3071.05.

Asserting there is lot of foreign capital flow into the country, he said temporary net selling by FIIs did not mean that there is an outflow of foreign capital.

"My information is that there is lot of foreign capital waiting to come into India through FIIs. I believe we will continue to attract FIIs' capital," he said.

On net basis, there was positive growth in foreign capital flow into the country, Chidambaram said, adding it was reflected in forex reserves that are being added to the country's kitty.

The finance minister said the country needed to attract FDI as well -- not as substitute to FIIs, but in addition to FIIs.

"Last year, we attracted more FDI than before and in the current year, we will continue to attract more FDI than before because there are huge plans in roads, airports, seaports, power and telecom. These are the sectors which attract huge FDI capital," he said.