'Small investors must be careful in stock market'

New Delhi, Oct 3: With the Stock market index touching new peaks every day, Finance Minister P Chidambaram today sounded a note of caution to retail investors to be careful before putting in their money into the bourses.

"I do not think retail investors are entering the market at this level. I would advise them caution," Mr Chidambaram told reporters here.

The Finance Minister, however, welcomed the interest being shown by Foreign Institutional Investors(FIIs) in the Indian stock markets.

"There is apparently a lot of interest from foreign institutional investors. Why should we not welcome it," he said.

The BSE Sensex is now hovering around the 18,000 mark and has recorded the most handsome gains in recent days. .

An important reason for the FII interest in the Indian stock markets is the repeated cuts in interest rates by the US Treasury following signals of a slow down in the world's largest economy, Their net investments in Indian bourses stood at Rs 19,625.3 crore in September alone.

The Finance Minister also said that in the event of RBI approaching the government, the Finance Ministry would review the ceiling on Market Stabilisation Scheme Bonds, a mechanism to drives out liquidity which flows into the market because of the RBI intervention in the forex market.

UNI