Banking on Modi, foreign investors to pour $60 bn into India-The Hindu
Foreign investment inflows are estimated to more than double and cross the $60-billion level this fiscal as overseas investors repose confidence in the Narendra Modi-led government that is expected to unleash reforms to reboot the economy, says an Assocham study.
“Riding on huge expectations from the incoming Modi government, global investors are gung ho on the Indian economy which is expected to witness over 100 per cent increase in foreign investment inflows — both FDI and FIIs — to above $60 billion in the current financial year, as against $29 billion during 2013—14,” the study projected.
The net foreign investment inflows, led by aggressive foreign institutional investors (FIIs) in the Indian equity and debt markets in 2014—15, are expected to even overtake the figure of $46.17 billion during fiscal 2012—13, one of the best years for overseas investment inflows, it estimated.
“The unfolding scenario also points to easing of prices and lowering of interest rates, the two major challenges that the Indian economy had been facing for some years now,” Assocham President Rana Kapoor said.
However, the emerging situation will pose a new challenge to the Reserve Bank to deal as it will have to balance the rupee rate and inflation from the increased liquidity into the system.
The new Finance Minister and the RBI, thus, will have to be on the same page in dealing with this scenario which will see strengthening of Rupee and a further improvement on the current account balance, Assocham said.
In the current fiscal, the FII investment would remain more than the FDI inflows, Assocham said. The expectations are that FII investment in both debt and equity could exceed $35 billion while the FDI money could be above $25 billion.
“If the Modi government is able to take some reform-friendly measures along with taming inflation and earning goodwill of the people, the FDI will do a fast catch-up with the FIIs. The euphoria must be taken advantage of and things will move on from there,” Mr. Kapoor said.
Significantly, India will continue to outpace all other emerging economies in terms of FII inflows which would not be affected much by the tapering of the Quantitative Easing by the US Federal Reserve, the study found.
Besides, as the new government goes about removing obstacles in investment, FDI is likely to pick up again in the key infrastructure areas of ports, airports, roads and energy, the study said.
Link The Hindu
The markets are also expected to react to the first set of announcements by the new government and will keenly watch the ministry formation. Stocks are also expected to remain volatile as investors could take risk off the table ahead of derivative expiry.
Companies likely to be directly impacted by government initiatives are likely to remain in focus in the coming days, market players said.
Last week, the benchmark indices posted a third straight week of gains, rising nearly 10 per cent during this period. Following the sharp run-up, analysts say the Sensex and the Nifty could consolidate at current levels, while individual stocks could continue to buzz.
"The market has undergone a sharp rally in consecutive weeks and the important event of the general elections has already unfolded. So a time-wise correction currently being witnessed is essential from a longer term perspective," said a client note by Angel Broking.
Last week, the BSE's benchmark Sensex gained 572 points, or 2.4 per cent to 24,693.35, while the 50-share Nifty of the National Stock Exchange added 164 points, or 2.3 per cent to 7,367.10. The broader market outperformed the benchmarks, with the BSE small-cap index gaining 15.7 per cent and the BSE mid-cap index adding 11.6 per cent during the week.
Analysts said the markets continue to remain in 'bull territory'. "The bias in the market remains upwards. But we could see some profit-booking in stocks that have run up sharply," said Sudhakar Ramasubramanian, managing director, Aditya Birla Money.
Analysts said the shift from defensives to high-beta is likely to continue for some weeks. "We continue to remain positive on financials, as well the realty and cement sector," said Tirthankar Patnaik, director, strategist and chief economist, Religare Capital Markets.
The real estate sector was the top performing one last week, having gained 23 per cent, followed by power which was up 17 per cent and public sector undertakings by 13.6 per cent.
The quarterly and annual economic growth estimates are likely to be announced next week.
Broader market likely to continue to outperform benchmarks-Business Standard026 May 2014
The markets are also expected to react to the first set of announcements by the new government and will keenly watch the ministry formation. Stocks are also expected to remain volatile as investors could take risk off the table ahead of derivative expiry.
Companies likely to be directly impacted by government initiatives are likely to remain in focus in the coming days, market players said.
Last week, the benchmark indices posted a third straight week of gains, rising nearly 10 per cent during this period. Following the sharp run-up, analysts say the Sensex and the Nifty could consolidate at current levels, while individual stocks could continue to buzz.
"The market has undergone a sharp rally in consecutive weeks and the important event of the general elections has already unfolded. So a time-wise correction currently being witnessed is essential from a longer term perspective," said a client note by Angel Broking.
Last week, the BSE's benchmark Sensex gained 572 points, or 2.4 per cent to 24,693.35, while the 50-share Nifty of the National Stock Exchange added 164 points, or 2.3 per cent to 7,367.10. The broader market outperformed the benchmarks, with the BSE small-cap index gaining 15.7 per cent and the BSE mid-cap index adding 11.6 per cent during the week.
Analysts said the shift from defensives to high-beta is likely to continue for some weeks. "We continue to remain positive on financials, as well the realty and cement sector," said Tirthankar Patnaik, director, strategist and chief economist, Religare Capital Markets.
The real estate sector was the top performing one last week, having gained 23 per cent, followed by power which was up 17 per cent and public sector undertakings by 13.6 per cent.
The quarterly and annual economic growth estimates are likely to be announced next week.
No comments:
Post a Comment