Business Daily from THE HINDU group of publications
Monday, Dec 17, 2007
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Business Daily from THE HINDU group of publications Monday, Dec 17, 2007 ePaper | Mobile/PDA Version |
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Stock Markets Markets - Outlook Columns - A Ringside View
Dalal Street may look for a breather in the first few days of this week, but is likely to rebound by the end of the week. Market intelligence suggests that operators are seeking some headroom for interim distribution before the Street prepares itself to absorb increase in liquidity in the coming weeks. Indications are that the FII inflow is likely to go up in the next four weeks. The advance tax figures, which are to be available this week, would trigger expectations regarding corporate performance during the quarter to December 31. The information technology sector stocks, according to market intelligence, are going to have an unaffected first quarter of 2008 as the US corporates do not reckon any immediate cut in their IT spends. Last week, the overseas fund flow turned distinctly net positive. However, mutual funds pumped out money in the net. FIIs sideshowFrom January 1 to December 15 this year, FIIs have poured in a net investment to the tune of around Rs 71,000 crore against of about Rs 39,000 crore in the corresponding period last year. Anecdotal evidence indicates that the current inflow from abroad is more towards derivatives than cash. Hedge funds are understood to be modifying their strategies around the derivatives. Though the SEBI curbs on participatory notes in October and the unfolding credit crisis in the US and Europe have had some temporary negative influence on the incoming flow, the overall quantum never suggested a trend reversal. Much of the investments through derivative instruments such as PNs, which have to be wound down in the next one and half years, were primarily in derivatives segment of the Indian equities market. Growing appetiteThe growing gut feeling is that the global investors’ appetite for Indian equities has not waned a wee bit. In fact, some players suggest that in 2008, more windows are likely to open up for global retail investors to participate in the Indian equities. For example, investors in the US would be able to directly participate in Indian equities from February 22 next year through dollar denominated futures trading in the Sensex without ADR authorisation. In another emerging trend, a few US hedge funds are reportedly launching India-dedicated private equity funds. New innovative ideas are popping up all over the world for Indian equities as global investors gear up for a new year’s strategy. (Responses may be sent to jayanta_mallick@thehindu.co.in) More Stories on : Stock Markets | Outlook | A Ringside View
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