India and China stock market bubbles now real â Indian Finance Minister for the first time starts getting nervous Prithiv Chauhan Oct. 3, 2007 An aggressive buying by international funds in blue-chip stocks has created the stock market bubble in India. A new intra-day peak of 17,953 points in Sensex shows how far the bubble gas gone. China is a similar story. Stock market doubles in price in China within months. Chinese Government has stopped the international funds to participate and create bubble like in India. But their bubble has come from local small investors who cannot gain much from traditional savings. Indian Finance Minister P Chidambaram cautioned retail investors in India for the first time. He is worried about the consequence. The international funds bring in mega funds and create the bubble. They can leave in moments notice creating a deep depression in Indian economy. Chidambaram worries about inflation, liquidity and growth. A catastrophic collapse (like that in 1929 in US) will cause a massive depression in India. Unlike US in 1929, India is very heavily populated. The economic catastrophe can easily translate into riots, hunger and even civil war. China faces the same grim outlook. The food prices in China and India are increasing close to 3% per quarter while official inflation is registered at one fifth of that. The crude oil price is building a massive trouble spots in both the economies.