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New Delhi: Stock markets in India rose as finance minister moved to reassure markets on Monday the government was trying to shield the economy from financial crisis.
Shares of ICICI Bank, one of India's largest lenders, rose over 20 per cent after the chief executive said deposits were safe.
Fears about global financial crisis, which has wrecked many firms across Europe and the United States, has also gripped Indian markets.
Finance Minister Palaniappan Chidambaram appeared to address some of those concerns when he said the government, the central bank and the stock market regulator were coordinating on an hourly basis on a response to the crisis.
"We are working on more measures that will infuse liquidity, make credit intermediation smoother, and increase the confidence of depositors and investors," he told a news conference. "We hope to be able to announce them shortly."
Interbank lending rates fell, helped by a central bank decision to cut the proportion of deposits banks must keep in reserve by 150 basis points to 7.5 per cent, releasing about 600 billion rupees ($12.4 billion) from Saturday.
Overnight cash rates were quoting at 9.75/10.00 per cent on Monday, compared with Friday's close of 15.50-16.50 per cent.
"We are watching the situation carefully and we will respond swiftly according to the needs of the situation," Chidambaram said.
"Our banks are ready and willing to provide credit," he said.
The 10-year bond yield was at 7.71 per cent, below 7.75 per cent earlier and down from Friday's close of 7.79 per cent.
The rupee gained to 48.00 per dollar from 48.11/12 per dollar, boosted by state-run banks buying rupees on behalf of the central bank on Friday.
The stock market opened 3.3 per cent higher on Monday, helped by gains elsewhere in Asia after regulators around the world announced a raft of new measures, from guaranteeing short-term debt to taking stakes in lenders, to shore up the ailing financial system.
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