New Delhi, Oct 12 (UNI) Finance Minister P Chidambaram today said the steep rise of the stock markets both surprised and worried him, but exuded confidence that "things will cool down after a while".
The Finance Minister attributed the rise of the SENSEX to dizzy heights to strong foreign inflows of funds from a number of sources and added that speculators were taking advantage of the situation.
The remarks of the Finance Minister came in reponse to a Question that was posed to him after his address at the 'Hindustan Times Leadership Summit'.
''Our assessment is the Sensex is driven by the copious flow of funds from a number of sources abroad. To some extent, speculators are taking advantage of the Sensex, but I think things will cool down after some time,'' he said.
"If the SENSEX is doing well despite the political situation, why should I be displeased", he quipped.
''The rather steep rise in the Sensex sometimes surprises me, sometimes worries me,'' Mr Chidambaram said adding that fundamentals do not change so rapidly from day to day.
The 30-share BSE bellweather index hit its 16th record high in 17 sessions this morning, but closed down 2.1 per cent. The BSE Sensex touched an all time high of 18,844 before closing at 18,451.
Foreign funds have bought a net 16.2 billion dollars into the bourses this year till October 10, including 3.2 billion dollars this month.
Mr Chidambaram also discounted fears that FII money would flow out of the country, saying that this has not happened ever since the reform process was launched 16 years ago.
The question in this regard related to fears that hot money could move out of the country just as quickly as it came in.
The Finance Minister, however, said the inflows had contributed to a hefty appreciation of the rupee. The rupee has risen more than 12.5 per cent this year.
"The rupee rise is not in our comfort zone,'' he said.
The Finance Minister said there was nothing in the air to suggest that monies would flow out of the country as the economy was driven by strong fundamentals and marco economic parametres.
"There is nothing to suggest that inflows would move out as steeply as they had come into the country", he said.
He said his recent visits abraad have convinced him that the inflows of investments would remain robust.