Brokers expect rally to continue on support from institutional investors
AFP
MUMBAI, January 4: Indian share prices are expected to rise next week on support from domestic and foreign funds, brokers and analysts said Saturday.On the Mumbai Stock Exchange (BSE) the 30-share BSE sensitive index was up 86.47 points or 2.37 per cent to 3,719.85 points Friday, over the previous week's close of 3,633.38 points.The 100-share national index rose 39.35 points or 2.49 per cent to 1,614.28 points Friday from 1,574.93 points the previous week. Stock broker Ajit Ambani said: ``The market is looking up. Domestic speculators are very active and though the sentiment is not upbeat prices will be up on technical factors. ``Prices had already fallen to low levels, but current buying is largely speculative and not based on fundamentals of companies,'' he said. Hoare Govett Asia analyst Devesh Kumar said: ``We expect the BSE index to be up about 100 points next week. The current recovery in prices will continue. Some foreign funds will come in to buy, though not on a very big scale.'' Kumar
said India was set to post a good gross domestic product growth of about five per cent, ``which is good in relation to the turbulence in the other economies of the region.'' The Indian stock market went through a turbulent phase in the last quarter of 1997, in line with the turmoil in the Asian markets. About Rs 1,100 billion (28 billion dollars) were wiped off share values on the BSE in the four months to November. Foreign investors, who were permitted to invest on the Indian stock markets after free market reforms, withdrew $ 148 million in November and December."The first quarter of 1998 will see the stock market being flat," said UBS Securities India analyst Subhra Subramaniam. "Not much foreign money will come in as fund managers will wait for the political parties to put out their poll manifestos. "The outcome of the elections will be crucial to determine how much foreign money will come to India this year,'' he said. Subramaniam forecast the BSE index would stand around 4,500 points by the
end of 1998.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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