Indian ministers move to soothe rattled markets

By Surojit Gupta

NEW DELHI (Reuters) - Indian ministers tried to calm rattled markets on Wednesday, saying more cash could be provided to ease liquidity and stressing that Asia's third-largest economy remained strong and could withstand the global financial crisis.

India's main BSE share index fell more than 8 percent at one stage to its lowest in two years, but recouped much of the day's losses to close down 3.14 percent, while the rupee dived to its lowest in more than six years during the day.

Around the world, panic gripped the stock and foreign exchange markets once again as a global financial turmoil intensified worries of a recession and sent stocks reeling.

"If need be, we will take further measures to infuse liquidity in the market," Finance Minister Palaniappan Chidambaram told reporters, referring to measures taken this week to ease cash flows.

"I am hopeful investors will start coming to the market."

Meanwhile, Trade Minister Kamal Nath said the economy's strong fundamentals would help it through the crisis and ensure it continues to be attractive for foreign investors.

"As we see today the global economy is in a deep crisis. We see in the United States, we see in Europe economies in the hospital," Nath told a news conference.

"But India, with its strong fundamentals, we have the confidence to tide over this global financial crisis."