Financial analysts and investment managers here reacted unenthusiastically to the government decision to increase the investment limit for foreign institutional investors (FIIs) from 30 per cent to 40 per cent.
While admitting that it would send a "positive signal", they did not expect it to boost the sensex.
Said an analyst with an European rating agency, "Given what has been happening in the past two weeks - sanctions and Moody's downgrade - it was necessary for the government to make an announcement that would have a positive impact on the market. Some kind of a package was needed for the dropping market. But it's not such a step that would suddenly make the FIIs take an interest." The government might next announce the buyback of shares, he predicted.
A mergers and acquisitions executive was a little more cheerful. He felt that the move would "counter-balance some of the effects of the blasts. Increasingly, the tendency is to look at a policy statement as a signal."
He felt that sectors like software in which FIIs have good interest could benefit.
Said another: "In light of the plunge in southeast economies, India would have been a safe haven. India with sound fundamentals should have gained, but blew it." This might be the beginning of a step in the right direction, she added.
