Finance Minister Pranab Mukherjee has attributed the stock market crash to withdrawal of funds by foreign investors and depreciation of the rupee.

“Markets have crashed because of continuous withdrawal of (funds by) FIIs. There is still uncertainty prevailing in the Eurozone. Rupee depreciation also has adverse impact. All these cumulative effects are there,” he told reporters in New Delhi.

He said this while responding to questions on sharp plunge in the stock markets.

During the intra-day trade, the BSE Sensex crashed by 587 points, but recovered later.

Value of the Indian Rupee had touched an all-time low of 52.73 against the US dollar on Tuesday.

Foreign Institutional Investors (FIIs) have withdrawn Rs 2,352 crore from the equity market, between November 16 and November 22 this year, adding to the woes of stock markets.

No respite in Re decline, ends at all-time closing low of 52.35

Falling for the eight day in a row, the Indian rupee on Wednesday ended at 52.35/36– its all-time closing low– against the US dollar amid continuing signs of captial outflows and steep fall in stock markets.

Dealers said persistent capital outflows amid late dollar buying by importers kept the rupee under pressure despite suspected Reserve Bank of India (RBI) intervention.

Referring to the decline in the value of rupee, Finance Minister Pranab Mukherjee in New Delhi said, “RBI is closely monitoring the situation and will do the needful as required.”

In a see-saw trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened weaker. However, dollar selling by non-PSU banks as well as suspected intervention by the central bank helped the rupee to bounce back to the day’s high of 51.70.

The Reserve Bank’s intervention, however, could not be officially ascertained.

The rupee had on Tuesday plunged to its life-time low of 52.73 intra-day.

At the fag end, the rupee came under pressure again on dollar demand from importers, mainly oil refiners, to meet their month-end needs and touched a low of 52.60 before concluding weak at 52.35/36, down 6 paise from its last close.

FIIs sold shares worth USD 623.99 million in last six days since 15th November.