New Delhi: Assuring that stock markets are being closely watched to prevent any undesirable movement, Finance Minister P Chidambaram has asked investors to dispel their fears and remain invested.
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. However, he refused to give any advice to punters.
PTI quoted Chidambaram as saying, "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".
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.
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