Indian stocks may edge down after recent rally
Monday, 30 March 2009
MUMBAI, Mar 29 (AFP): India's stock markets could erode recent gains this week as investors lock in profits after a sharp rally this month, dealers said.
For the week to March 27, the benchmark 30-share Sensex index rose 12.06 per cent or 1,081.81 points, to 10,048.49, its third straight week of gains.
Improved overseas fund flows and a possible interest rate cut may eventually boost sentiment further, dealers added.
India's markets crossed the key psychological 10,000 mark this week with the benchmark 30-share Sensex rising over 20 per cent in three straight weeks.
Investor sentiment has improved on hopes of a recovery across global economies and expectations that the troubled US financial sector will recover faster than earlier believed.
This week foreign funds bought Indian stocks worth nearly 350 million dollars.
Foreign funds have sold equities worth 1.66 billion dollars so far this year after selling shares worth 3.05 billion dollars in the same period last year.
For the year 2008, overseas funds sold Indian stocks worth 13.13 billion dollars.
India's inflation has fallen to a near-zero level of 0.27 per cent for the week ending March 14 from 0.44 per cent the previous week, according to the Wholesale Price Index, India's closest-watched cost-of-living measure.
Dealers say this gives India's central bank room to lower rates further to boost demand in a weakening economy.
"The turnaround in sentiment is in the belief that the US bailout plans will help resurrect the financial system soon which will ease the global liquidity situation," said Dinesh Thakkar, chairman of Mumbai's Angel Broking.
"Money could then flow towards attractive equity investment destinations, including India," he said.
For the week to March 27, the benchmark 30-share Sensex index rose 12.06 per cent or 1,081.81 points, to 10,048.49, its third straight week of gains.
Improved overseas fund flows and a possible interest rate cut may eventually boost sentiment further, dealers added.
India's markets crossed the key psychological 10,000 mark this week with the benchmark 30-share Sensex rising over 20 per cent in three straight weeks.
Investor sentiment has improved on hopes of a recovery across global economies and expectations that the troubled US financial sector will recover faster than earlier believed.
This week foreign funds bought Indian stocks worth nearly 350 million dollars.
Foreign funds have sold equities worth 1.66 billion dollars so far this year after selling shares worth 3.05 billion dollars in the same period last year.
For the year 2008, overseas funds sold Indian stocks worth 13.13 billion dollars.
India's inflation has fallen to a near-zero level of 0.27 per cent for the week ending March 14 from 0.44 per cent the previous week, according to the Wholesale Price Index, India's closest-watched cost-of-living measure.
Dealers say this gives India's central bank room to lower rates further to boost demand in a weakening economy.
"The turnaround in sentiment is in the belief that the US bailout plans will help resurrect the financial system soon which will ease the global liquidity situation," said Dinesh Thakkar, chairman of Mumbai's Angel Broking.
"Money could then flow towards attractive equity investment destinations, including India," he said.