Sometimes surprises me, sometimes worries me-FM

The Finance Minister, Mr P. Chidambaram, on Friday said that the recent “steep rise” in stock market indices to record highs worried him sometimes, even as he asserted that the more than anticipated capital inflows were an important reason behind the sharp rise in share prices.

“The rather steep rise in Sens*x sometimes surprises me, sometimes worries me. Our assessment is that Sens*x is driven by copious inflow of funds from number of sources. I don’t think fundamentals have changed so rapidly from day to day to warrant such a steep rise,” Mr Chidambaram said at Hindustan Times Leadership Summit here today.

The Finance Minister also said that speculators are to some extent taking advantage of the rise in Sens*x. The benchmark Sens*x extended its decline, after the Finance Minister’s observations, to close at 18,419.04, down by 395.03 points from the previous day’s close.
Outside comfort zone



On the rupee’s rise to nine-year highs against the US dollar, the Finance Minister said the current level was outside the Government’s comfort zone and that exchange rates have to be managed without hurting investments.

“We have to maintain competitive exchange rate. I agree that these capital inflows are more copious than we would like them to be. It’s a new situation. I think we will gain mastery over the new situation.”
Budget



Meanwhile, he told the gathering that he expects to present the Union Budget (in February) and that he would stick to the reformist course.

“It will be a Budget which will continue the effort we made in the four budgets. There is no reason to change the course. On the contrary, we must remain on the course and I will remain on the course,” he said, when asked whether the Budget would be a populist or a reform-oriented one.

Stating that the UPA Government has delivered 8.6 per cent growth rate on an average, he said the most pessimistic projection for this fiscal was 8.5 per cent and that he did not see any reason for changing the course.

But I should say Sens*x gives me anxiety!!!!