The extent of foreign institutional purchases amid the start of ECB's second round of funding operation for the region's lenders on Wednesday will be key to the prospects of Indian stocks in the week ahead. Though a section of the market feels that some fatigue is setting in, with the Sensex surging 16% so far in 2012 without any big breather, optimists are betting that a portion of the cheap money pumped by ECB into banks there could make its way to riskier assets, including Indian equities. Since January 2012, foreign funds have poured over $5 billion into Indian equities, after ECB's longer-term refinancing operations extended three-year loans to the tune of 489 billion (Rs 32-lakh crore) to 523 European banks. The money helped banks refinance debt and helped avert a possible crash of the continent's financial system.
Source: Economic Times
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