As on September 8, 1999, the returns from Indian markets was a hefty 55 percent, compared with near 70 per cent for the South Korean bourses, 30 percent from Malaysia and 20 per cent from Thailand. In fact, the Indianmarkets performed fairly well all through the year except early May. In theemerging markets segment, Russia, Brazil and India were close at 50-60 percent, respectively. Mexico and Hungary were way behind at 5-10 per cent. Inthe co-movements of stock indices in India and a few OECD countries, thelatter are way behind (Japan at below 30 per cent, UK at less than 10 percent and the US at 20 per cent).

With FIIs calling the shots on Indian bourses, these figures should be asolace for investors waiting for a rebound in share prices. After rockingthe 5000+ boat with their selling wave, FIIs are now expected to stage acomeback and resume buying, especially as most stocks are available at veryattractive valuations. A look at the FII movement and the market indiceswill show that foreign funds have booked profits at high levels and enteredwith the prices were rock bottom (for example in early May). With the marketexpected to stablise at around 4250-4300 level, a flush of FII funds can beexpected.

While marketmen are generally optimistic on a FII comeback, most expect ahigher allocation for the Indian market next year. ``The economic revivalhas just started and despite the rise in the last few months, there is a lotof steam left in the cyclical and economy stocks. On the other hand, most ofthe IT companies have been proactive and shifted their business profile toE-Commerce and related areas which are high growth sectors. The Y2K fears isalso unfounded. Clearly, the Indian markets still hold a lot of promise andreturns for FIIs,'' says a BSE broker.