Foreign Investors Turn Bullish On Indian Stocks

Foreign investors have turned bullish on India as the Bombay Stock Exchange (BSE) sensitive index crossed the magical 4,000-mark.

The Sensex has got way to go. Theres lots of buying interest both from domestic buyers and FIIs, says Paul Ballantyne at Barclays Global Investors.

The Sensex pierced the psychological 4000-mark and jumped to a 52-week high of 4060.45 on Friday before ending the day at 4029.99, scoring a gain of 47.04 points over the previous close of 3982. 95.

Most analysts say that the Sensex will rise sharply in the next one month. I think it is in a bull phase. The market could easily go up by 200 or 300 points in the next one month, says Jeff Chowdhury at Foreign & Colonial.

 

But, fund managers warn that the market could be thrown off course by a political crisis or by the continuing imbroglio over oil prices.

We cant insulate the stock market from the politicians, says one fund manager.

Analysts say that Indian stocks look undervalued compared to other Asian markets and are drawing foreign interest.

India is looking relatively cheap compared to most other Asian markets, says Foreign & Colonials Chowdhury.

Most analysts say that there is likely to be a consolidation of share prices before they make their next move upwards.

Analysts say there is plenty of reason of optimism in the near future.

The market has been inching up since December with one or two blips due to politics. There has been underlying investment demand for quite some months, says Ballantyne.

However, there are differences of opinion about how quickly the Sensex will rise over the next few months. I cant see it tearing away immediately. May be, it could rise further after the monsoons and further news on the corporate front, says Deepak Lalwani of Astaire & Partners. Others point out that the rally is still confined to the big blue chips.

People are sticking to absolutely cream stocks, says one broker.

Many analysts are still worried about the continuing differences over oil prices and say it could stall the market.

I dont think this is a party that will last unless they sort out oil prices, says Avinash Vazirani. Nevertheless, there are hopeful signs, according to most analysts. They point out that the Unit Trust of India (UTI) has not started selling yet as they have done during recent rallies.