No scam in the offing in stock markets: FM

"There is no cause for alarm. It is completely wrong to say a scam is in the offing and I deny such reports," Chidambaram told PTI emphasising that his concern is not about the number the Sensex will hit but the price to earnings ratio, which is in the comfort zone.

"As long as P/E ratios are in the comfort zone and corporate performance is good, I don't think there is a cause to worry," he said.

During the bull-run in 90s and early 2000 when the stock market crashed, Chidambaram said the P/E ratio had crossed 30, 35 and even 40 and "there is no such cause for worry now" with the P/E ratio at about 16.5.

At the same time, the Finance Minister said the government was keeping a close watch on the stock market to ensure it functioned in an orderly manner. In this connection Chidambaram had called a meeting of an internal committee of advisors on the capital market on Thursday.

This was followed by a meeting with SEBI chairman M Damodaran on Saturday, shortly before the Finance Minister left on a foreign tour to participate in Commonwealth Finance Ministers Meeting in Barbados and the World Bank-IMF meeting in Washington.