Noting that some volatility is to be expected in the bourses due to turbulence in global financial markets, Finance Minister P Chidambaram on Friday said the stock market is not the sole indicator of India's economy.
"The stock market is reflecting worldwide developments. In fact, it is really reflecting the developed economies as well as the Asian economies," he said in a reply in Lok Sabha.
"But some volatility is to be expected especially when there is turbulence in the international financial markets," the minister said.
"The stock market is an important indicator, but we should not look at the stock market as the sole indicator of India's economy," Chidambaram said.
He said the Sensex only captures the share price movement of 30 stocks and the Nifty captures the share price movements of either 50 or 100 stocks. He said the country has a well-established regulatory system in place and it would ensure there is no excessive volatility in the market.
On the appreciation of the rupee, he said it is not solely attributable to the US recession. "It is the result of a number of factors like our productivity gains in India -- both labour productivity and capital factor productivity," Chidambaram said.
He said the rupee has appreciated rather significantly against the US dollar, which he said is weakening for reasons which are relevant to the US. The rupee has not appreciated to the same extent against the Euro or the Yen, Chidambaram added.