The market talked of a large US pension fund, GE Pension Fund, looking at India closely, while some brokers expected the FIIs to bring in another Rs 1,000 crore.

Driven by the renewed interest in Indian paper, the GDR index scaled its 52-week high during the week when it touched the 800-mark. The rise in the GDR market has been faster than the Indian market.

Driven by fresh inflows, the Sensex surged another 59 points on Friday, recording a rise of over 460 points in seven sessions.K R Bharat, managing director, Credit Suisse First Boston, sees the visible signs of global recovery, FII money will continue to flow into emerging markets and through them into India.

``Allocations to the Asian region have improved and there are improved signs of an upturn in the economy. The mood in the market is positive and the bargain hunters are coming in to make themost of the increased allocations,'' he adds. Another fund manager attributes the entry of new FIIs to the success of the demat settlement process.

``These funds need easy exit and entry as most of them invest out of their open-end funds.'' The other reason for the fresh flow of funds is the saturation in some of the other emerging markets.

Tushar Shah of BSE, who is bullish on the FII flows, sees another Rs 1,000 crore coming into the market. There are eight new FIIs who have got permission to invest in Indian markets, he points out. ``Due to such inflows all technical barriers in the market have been broken.''

Chief executive officer of Sun F&C Mutual Fund Nikhil Khattau expects the funds flow into the market to continue as "globally the sentiment has improved and on the domestic front both retail and corporate clients are showing positive inclinations.''

Bobby Surendranath fund manager at ITC Threadneedle Asset Management Company does not rule out the Sensex touching 4,000 mark. In his view theprices of petrochemical, banking and commodity stocks are relatively cheaper in India.

Tushar Shah also sees the inflow to accelerate as most other markets are saturating. Though the immediate outlook for the next week is cautious, he does not rule out the possibility of the Sensex touching the 4000-mark.