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Inflation, interest rates are still viewed as threats

Paul Noronha

Peak hours: The screen outside the BSE shows the Sensex touching new high of 14745.97 in the opening hours; However, it closed flat at 14,664.26 on Monday.

Our Bureau

Mumbai, July 2 The net investments of Foreign Institutional Investors in Indian companies has increased by Rs 7,330 crore for the six months ending June 30, compared to the six month period last year, according to data available on the SEBI Web site.

FII’s have pumped in Rs 1,8931.80 crore for January to June. While they were net buyers to the tune of Rs 1,1601.80 crore for the same period in 2006.

“The FII outlook for the Indian equity market is still positive as the Indian growth story continues to attract interest,” said Mr Rajen Doshi, Country Head-India, Nikko AM.

Mutual Funds have also been net buyers at Rs 2,042.6 crore for January-June period. Mutual Funds started the year as net sellers, selling to the tune of Rs 1,420.20 crore, Rs 517.30 crore and Rs 1,736.90 crore for the months of January, February and March, respectively. However, the buying picked up in the next three months.

Retail Institutional Investors, however, were net sellers at Rs 1,353.22 crore for June. They were also net sellers for the year at Rs 5,627.90 crore. Fund houses continue to have a positive outlook on the Indian equity market.

“In the short term, markets have been very positive over the last few months. Today as well, the Sensex hit an all time high. Valuations have increased and the trigger will be the quarterly results. In the long term as well, the outlook is positive,” said Mr Sanjay Prakash, Chief Executive Officer, HSBC Asset Management (India) Pvt Ltd.

Inflation and interest rates seem to still be viewed as threats to the market.

“Macroeconomic factors like inflation and interest rates are threats as they do not promote credit growth and the growth of the economy. However, now it seems that inflation is getting reigned in,” said Mr Prakash.

“The only threats would be geopolitical concerns, which are very small. Inflation could also be a potential threat but it seems to be under control now,” said Mr Doshi.

The infrastructure, capital goods and cement sectors are the ones that are looking good as those are the sectors that will drive India’s growth.

More Stories on : Stock Markets | Foreign Institutional Investors | Economy | Interest Rates

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