The market always reacts to news, but India's capital market strangely seems to be ignoring a series of warnings against the rise in the country's key share index.
'Investors, Watch Out,' screamed an advertisement issued in newspapers by the Bombay Stock Exchange, which asked the public to follow a list of dos and don'ts before putting their money in the market.
"There are attendant risks associated with it (the market)" the advertisement said.
"Be cautious about stocks, which show a sudden spurt in price or trading activity, especially low priced stocks. . . don't deal with unregistered brokers. . . don't deal based on rumours generally called 'tips'," it read.
But even such blatant warnings do not seem to cower down the market, whose benchmark 30-share index rose by 63.88 points to close at a new high 8,444.84 on Monday.
The current spurt in the market contradicts the way it reacted to some unfriendly statements by members of the ruling coalition and shed 565 points on May 17, 2004 -- a day that has come to be known as Black Monday.
Today, the market seems to have learnt to ignore remarks that have negative connotations.
The index has been rising despite the CPI, a key supporter of the UPA government, demanding a probe into the bull run, which it suspects to be a result of manipulation by notorious syndicates.
Even Finance Minister P Chidambaram had advised investors to take 'informed decisions' after the Sensex touched the 8,000 mark on September 8, this month.
The BSE also warned investors against 'blindly' following media reports on corporate developments, saying these could be misleading. "Don't get carried away by the onslaught of advertisements about the financial performance of companies in print and electronic media."
It also cautioned investors against blindly imitating the investment decisions of others.
Further under the don'ts list, it warned investors against being misled by companies showing approvals from government agencies, "as the approvals could be for certain other purposes and not for the securities you are buying.
"Don't leave the custody of your demat transaction slip book in the hands of any intermediary."
Under the dos' list, the BSE asked investors to always deal with market intermediaries registered with the exchanges or the Securities and Exchange Board of India, give clear and unambiguous instructions to broker/agent, insist on contract notes from the broker and in case of doubt about the transactions, verify the genuineness of the same on the Exchange Web site.
It also wanted investors to check the credentials of the companies, its management, fundamentals and recent announcements made by them before placing an order.
"The sources of information are the Web sites of the Exchanges and companies, databases of data vendor, business magazines, etc," it said.
BSE also asked investors to adopt trading/investment strategies commensurate with their risk bearing capacity as "all investments carry risk, the degree of which varies according to the investment strategy adopted.
Finally, it asked them to be "informed that there are no guaranteed returns on investment in stock markets."
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