Finance Minister Pranab Mukherjee on Friday said the plunge in the stock markets is purely due to external factors, like concerns over the U.S. recovery and Euro Zone debt crisis, and hoped the volatility is temporary and it would recover soon.

“This is nothing domestic. It is substantially due to external factors,” Mr. Mukherjee told reporters here.

The stock benchmark Sensex had crashed by over 700 points to slip below 17,000-point level for the first time since May last year. However, as the day progressed it made some recovery and the sensex closed 387 points lower.

“This is mainly because of the fact that some projection has been made about poor recovery of U.S. This has affected the market sentiment. Current volatility is temporary. Hope that there will be a recovery shortly,” the minister said.

Mr. Mukherjee cited two-main reasons for fall in stocks world over.

“Asian stocks are tumbling today in the light of sharp sell off in the world markets due to poor economic indicators in the U.S. and fears of sovereign debt default contagion in Euro Zone spreading to other European countries,” he said.

“Therefore, it has its downfall in the Indian market,” the minister added.

The sharp plunge on Indian bourses followed an overnight meltdown in the U.S. market amid concerns that the American economy might slip into recession.

Negative trends in Asian and European markets further added to the selling pressure on Indian bourses.

Keywords: sensex crash