Leading stock exchange BSE on Wednesday joined its bigger rival NSE in alerting investors against fraudulent tips and stock recommendations promising high returns.
A day after the National Stock Exchange issued an alert to this effect in leading newspapers, the Bombay Stock Exchange followed suit with a similar ad campaign.
Today's alert follows a sharp plunge of about 950 points in the BSE's benchmark Sensex over the last couple of days. A high level of volatility was continuing on the bourses for the third day in a row on Wednesday.
Asking those planning to invest in stocks to stay on the alert, the BSE said that investors should do a thorough evaluation before investing in any security.
The bourse also asked the investors not to "get misled by recommendations in newspapers, electronic media, websites." "Do not get swayed by promises of high returns. Verify the tall claims made in such advertisements," the alert said.
"Be careful about stocks that show a sudden spurt in price of trading activity without a change in the fundamentals of the company," it said, while asking the investors to check its website for authentic price-volume data, financials and shareholding patterns of companies.
Yesterday, just a day after its barometer Nifty recorded biggest single-day loss of 270.70 points, NSE had issued a similar alert, while asking investors to tread carefully before investing in equities and also to keep away from rumours and advertisements promising large returns.
"Do not be attracted to stocks promoted by internet websites, research reports, tips etc unless you have done adequate study of the company," NSE said.