FM rules out stock market scam

Chidambaram says the market has factored in good second quarter results.

Finance Minister P Chidambaram today said the volatility in the stock markets in the last few days was not the result of any scam.

"There could be one or two adventurous players. But that does not mean that there is a scam," Chidambaram told CNBC-TV 18 in an interview.

The finance minister, who is in the United States, said the markets had factored in good second quarter results of Indian companies and the strong economic fundamentals which resulted in a rise in the indices earlier in the week.

"The reason for my confidence is that, it is a well-regulated market.... Therefore, I think that the market will reflect the fundamentals of the economy. We should wait for the second quarter results. If the second quarter results turn out to be as good as the first quarter results, then the conclusion can only be that the market has anticipated the second quarter results," he said.

Chidambaram said that the price-earnings ratio was still in the comfort zone. 'So one should not get unduly worried if the market rises rapidly over two or three trading sessions, or drops in one trading session. What is important is that, whether the market is well regulated and whether the price-earning ratio is in a comfort zone,' he said.