With stock markets trading at all-time high levels, the capital markets regulator -- Securities and Exchange Board of India -- on Saturday cautioned small investors to take 'informed decisions' and asked them to look at safer instruments such as mutual funds.

"Sebi is not in the business of advising investors on investment decisions. But, I would urge small investors to take informed decisions," Sebi Chairman M Damodaran told reporters, replying to a query on the state of stock markets.

There were safer investment avenues such as mutual funds and urged the small investors to look at these instruments, rather than entering the stock markets directly, he said, on the sidelines of a seminar in Chennai.

'Sensex to cross 16,000 this fiscal'

The domestic stock markets is on a bull run with the Bombay Stock Exchange touching all-time high levels of 7,900 early this week.

Asked if he felt that the stock prices of all the companies were driven by their respective performances, the Sebi chief said he believed the stock markets, to a certain extent, were driven by the growth of the Indian economy.

However, there would be some companies which use the opportunity to drive up share prices. "There are thousands of companies (on Indian stock markets)," he said and promised action, once the manipulations come to light.

Replying to another question, Damodaran said the Sebi officials were working to 'harmonise' the takeover guidelines and the listing norms.

"Four of our best officers are working to put together the revised guidelines. The revised guidelines will be in place soon," he said.