Oct. 13: India today joined a concerted attempt by governments in Europe, the US and Asia to prop up battered stock and money markets with soothing words and truckloads of dollars.

Finance minister P. Chidambaram appeared before television cameras before the markets opened for trading this morning and said the government would pump in more money into the financial system to nip any sign of a credit crisis.

“We must banish fear,” Chidambaram said. “Depositors have nothing to fear because their deposits in banks are safe.”

Chidambaram’s uncharacteristic attempt to calm fears sent stocks soaring and the sensex closed 7.4 per cent higher than Friday’s level at 11309.09 points.

ICICI Bank, which had been clobbered all through last week, was the stock in focus today. It surged over 21 per cent at one stage before closing strong at Rs 425.10, a gain of 16.7 per cent over Friday’s close.

Stocks rallied across the world as Germany and Britain announced massive financial rescues for their crisis-ridden banks even as the US Federal Reserve led an orchestrated move by central banks to flood the global financial system with dollars.

In an unparalleled move, Britain said it would spend up to $64 billion to buy into top UK banks. Germany and France drew up similar plans.

US treasury secretary Henry Paulson said Washington was developing plans to buy equity in financial institutions to halt the prolonged market turmoil.

Delhi crisis talks

In Delhi, a crisis committee of finance secretary Arun Ramanathan, RBI governor Duvvuri Subbarao and other officials met to discuss measures that could be taken to stave off any crisis. The officials will continue their discussions in Mumbai on Wednesday.

Monday’s rally snapped a five-day losing streak and helped investors recoup some of their losses. Investors’ paper wealth rose by Rs 1,93,661 crore today.

“The worse seems to be over. Though the markets may react to negative news, this is a golden opportunity for investors who have surplus cash to buy select stocks,” said Dilip Dhavda, an analyst.

Domestic institutions emerged as strong buyers in the sensex stocks. Heavyweights like Reliance Industries gained over 3 per cent to close at Rs 1,574. Reliance Communications was one of the top gainers, rising nearly 20 per cent to Rs 284.70.

The rupee gained to 48.26 per dollar from 48.46 as state-run banks bought the Indian currency on behalf of the central bank.