Finance Minister P Chidambaram, on Wednesday, advised retail investors in the stock market to exercise caution.
“There is less possibility of retail investors entering the market at this level. I would advise them caution,” he told reporters here.

On his return from abroad, Mr Chidambaram had cautioned investors to guard against high volatility in the stock markets and advised them to make investment after making proper “home work.”

Do your homework

“My advice to investors is that they should do their homework. The home work should study the market. If they cannot do their homework they should trust those like mutual funds, who do their home work,” he said. On the reason for rise in Sensex, Mr Chidambaram said it apparently seems that there is lot of interest from foreign institutional investors (FIIs). There is no reason why we should not welcome it.”

Further, Mr Chidambaram said in case RBI approaches the government, it would review ceiling on market stabilisation scheme bonds (MSSB)

MSSB is a fiscal instrument adopted by the RBI to suck out liquidity which flows into the market because of the RBI intervention in the forex market.

As per finance ministry, the MSSB ceiling is Rs 1,50,000 crore per annum. Out of this, government has sucked out liquidity of Rs 1,42,000 crore so far this financial year.