"I do not think retail investors are entering the market at this level. I would advise them caution," he told reporters in New Delhi.

There is apparently lot of interest from foreign institutional investors, the Finance Minister said, adding: "Why should we not welcome it."

The Sensex went up to 17,953.07 points in intra-day trading on Wednesday, but came down from that level. It is currently ruling at 17,608.86 points, up 280.24 points over the previous day's close.

With US Federal Reserve cutting interest rates amid concerns over slowdown in the world's largest economy, the FIIs are finding Indian stock markets quite attractive. Their net investments in local bourses stood at Rs 19,625.3 crore in September.

He also said in case RBI approaches the government, it would review ceiling on Market Stabilisation Scheme Bonds, a mechanism to suck out liquidity which flows into the market because of the RBI intervention in the forex market.