The Hindu Business Line : No widespread probe; manipulation will not be allowed: Chidambaram

A DAY after he returned from his week-long foreign visit, the Finance Minister, Mr P. Chidambaram, stepped in to erase residual fears in the capital market that was shaken during his absence on reports of possible crackdown by Government authorities on market participation.

"The Government is not doing anything unusual or instituting a widespread probe," Mr Chidambaram said on Tuesday.

While stating that the authorities had not so far spotted any manipulation in the market, he issued a warning that they would step in the moment they sniff any manipulative activity. "Speculation is part of the capital market activity. One should not get unduly excited when people speculate in the possible movement in a share. But what is objectionable is manipulation. The Government will act when there is manipulation," he said.

He said the Securities Exchange Board of India was looking into `unusual' movement in some penny stocks while the Reserve Bank of India in its normal course was tracking the use of NBFC funds.

After the stock indices plummeted the previous week on fears of possible crackdown on broking entities by investigative agencies, Finance Ministry officials had done the initial fire-fighting by issuing similar clarifications.

Mr Chidambaram advised investors to take informed decisions and said those who cannot take such decisions should take the mutual fund route into the market.

"Investors must take informed decisions. One should make a good analysis before making investment decisions. For others, the mutual fund route is open," he said.

He said the present robust stock market is a reflection of healthy economy.

"We are satisfied that the market is reflecting the current fundamentals of the economy, especially of the corporate sector."

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