I expect Sensex to rise: FM

Finance minister P chidambaram today said the equity market will rise further on the back of increasing investor and business confidence, and assured that he was keeping a close watch on it.

"I expect the Sensex to rise with investor and business confidence rising. However, Sebi and I watch the movements very carefully to see if there is any manipulation," he said in reply to a question in the Lok Sabha.

"I do not worry and you should also not worry as long as the index movements are orderly. Sebi has assured me that the movement is absolutely an orderly one," he said.

Allaying fears of any external forces active in the market to reap super normal profits, Chidambaram said: "All sectors of the economy are doing well. Business confidence is high. Investor confidence is high. I expect the Sensex to rise."

"The underlying principle of the stock market is speculation. When there is manipulation, we shall intervene decisively. We are keeping a close eye on the price to earning (P/E) ratio. As long as they are within the acceptable limits, there is nothing to worry," Chidambaram said.

The minister also attributed the Sensex rally to the economic growth rate of 8.1% registered in the first half of the current  financial year. "Obviously, this adds to the impact over Sensex, and one should be happy about the good news," he added.