Inflows into Indian market to resume

Written by Markets Bureau | Mumbai, May 30 | Updated: May 31 2008, 06:16am hrs
The easing registration norms for Foreign Institutional Investors (FIIs) and allowing Non Resident Indian (NRI) and Sovereign Wealth Funds (SWF) to register as FIIs, would see the resumption of inflows into the Indian markets, reckon experts.

Jignesh Desai, head of institutional sales at SBI Caps says, "It's a positive move by the government and we will certainly see some capital flowing back to the Indian markets. Even China's policy for the foreign investments is rather rigid and amongst the emerging markets the Indian markets have compelling valuations. So certainly the focus is going to shift to the Indian markets".

Also, the move by Sebi to allow investment managers, advisors and institutional portfolio managers in the NRI category to register as FII, is seen as positive. Markets players think that this would increase transparency and increase the number of NRI fund managers getting registered with the regulator.

However, some segments of the market believe that the step taken in regards to the NRI may not have any significance. The reasoning is that these players were present in the market and had entered the Indian markets through the P-notes route.

Meanwhile, reacting to the positive cues from the Asian markets and modification of the External Commercial Borrowing (ECB) policy by the government, key Indian equity indices ended on a positive note on Friday. The Sensex gained 99.31 points or 0.61% before finally closing the day for 16,415.57.

While S&P CNX Nifty ended the day at 4870.10, gaining 34.80 points or 0.72%.