NEW DELHI (AFP) – Indian Finance Minister P. Chidambaram yesterday told investors “to do their homework” before investing in the domestic share market that has raced to new highs on the back of overseas fund flows.
The advice came as the benchmark Sensex index of the Mumbai stock exchange climbed 140.54 points or 0.82 percent to a record 17,291.1, beating the previous best of 17,150.56 on Thursday.
The index has set new highs on eight successive trading days.
“My advice to investors is that they should do their homework,” Chidambaram told reporters in New Delhi.
“And if they cannot do their homework, they should trust those who do their homework,” he said in an apparent reference to investment advisers.
“And for speculators, I have no advice,” the finance minister commented.
Chidambaram’s comments came a day after India’s Corporate Affairs Minister P. C. Gupta urged investors to be sensible.
“Investors have to take informed and not rumour-based decisions and it is our priority to ensure that small investors are protected,” Gupta said.
The Sensex has gained 10 percent since the US Federal Reserve cut interest rates by a surprise 50 basis points over a week ago.
As of Friday’s finish, the Sensex was more than 25 percent above last year’s close of 13,786.91.
Overseas funds have invested 11.63 billion dollars in Indian equities so far this year, more than twice the 4.86 billion dollars they pumped in during the same period last year.