While the markets are ecstastic about the steep rise in the Sensex, the Centre, though, is keeping a wary eye suspecting that “foreign” hands are hedging huge amounts into the market to create a “bubble that might burst”.

The market is being watched going by past experiences like Harshad Mehta scam, and could soon direct the Reserve Bank of India   and Securities & Exchange of Board of India to look into the massive surge in the Sensex, sources said.

“The finance minister himself is keeping a close eye. While on the one hand, he would not like to see the Sensex go down for obvious reasons, it is a cause of worry for him too that the growth has been wild and there is every chance of the bubble bursting some time taking a lot of retail investors down with it,” sources said. What has alerted the government is inputs that foreign hedge funds might be coming in huge amounts into the market, and the finger of suspicion, according to the sources, point towards American and Chinese inputs.  “The government could ill afford to have another crisis at this juncture of time,” they said.