Sensex???

For the past few months, the BSE sensex index has been touching new highs consistently and most of the stocks are trading with high volatality. Like any other investor I am also very much puzzled over this behaviour of the markets. Even the FM and PM have started losing their sleep and had instructed SEBI to monitor the markets more closely for any unusual activities.

Most of the financial news reports attribute this sudden rise in the sensex to the continuous flow of FII (Foreign Institutional Investor) money into the Indian markets. According to those reports this flow is due to the fast growth of Indian economy (8.1% growth during first quarter of 2005) and the associated belief in India rising stories.

But my worries are how long would the market sustain this high level? Since the FIIs are not under any control from Indian govt. and if they start pulling their money out of BSE/NSE then it would contribute to a huge downfall in sensex/nifty. It shows that sensex can be easily manipiulated by external players (FII) which is definitely not a very good sign. Already in the past our markets were battered by scamsters like Harshad Mehta and others. Another scam in the name of FII will give a body blow to the financial strength of the country.

The spurt of satellite channels are providing too much information about the markets from half-baked journalists. I am very critical of these channels and news papers which provide rosy picture of the markets and induce the retail investors into the already 'abnormally' HIGH markets. I am sure those who enter the stock exchanges during this bull run are going to lose their shirt unless otherwise they enter a fundamentally strong stock. I can only hope this bull run is not a scam as in the past, rest lies in the hands of SEBI. With all my fingers crossed I am hoping for the sensex to become stable sooon....