Allaying their fears, Finance Minister P Chidambaram has asked investors to remain invested in stock markets that he said are being closely watched to prevent any undesirable movement.
"All I can say is markets will rise, markets will fall. To a long-term investor, this should not cause any worry, he should believe in India growth story and remain invested unless there are very dramatic changes in the environment," he said in an interview to TV news channel.
However, he refused to give any advice to punters.
"What advice can I give to a punter? I have no advise to give to him," he said.
Pointing out that stock market was based on speculation, he said even if there were larger than expected numbers of speculators in the market, it should not cause any harm so long as there was no manipulation.
"As long as no one is manipulating the market, if 100 people are speculating on a market, one has to see the fundamental basis of the market," he said.
Referring to Price-Earning (P-E) ratio of 20-21 in the markets, Chidambaram said the level is not stratospheric and depends on the people's expectations from the market.
"Now, who am I to say the people should not expect price to be 20 times the earnings. People are willing to accept price 20 times the earnings, and that is what they were aiming at when they buy. Why should I second guess that?" he said.
He reminded the investors that P-E ratio rose to 35-40 during the scam period. "Nobody paid heed at that time (scam). Today...we watch it very closely to ensure that there are no undesirable movements," he said.
Source : www.financialexpress.com
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