Weekly Report: Markets evenly poised
Mumbai: The SENSEX (6584.32), helped by the positive trend on Monday, moved to a historic high of 6719, but turned bearish subsequently. A drop below 6450 would result in a slide to the 6100-6150 range. The NIFTY, other than Monday, too closed on a weak note for the remaining days of the week. The 2043 mark is a crucial level for the Nifty. A drop below this level would result in a downslide too the 1990-2000 range.

All in all the markets are evenly poised, with the bigger players seemingly ready to commit funds ahead of the Union Budget.

FIIs & MFs: The foreign institutional investors (FIIs) recorded net purchases of Rs2,394.1 crore ($547 million) in equities for the trading week ended February 18 while the mutual funds (MFs) were net sellers at Rs161.88 crore.

The foreign funds were net purchasers at Rs378.8 crore (USD 86.7 million) in the debt market for the period under review, according to the data available with the Securities and Exchange Board of India (SEBI) here. The mutual funds were also net purchasers in the debt market at Rs408.03 crore.

Overseas funds were net buyers in equities on all five trading days of the week.
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Direct trading in Indian markets: Catch 22 for Gulf NRIs
Mumbai: A pre-budget memorandum sent to the Finance Minister by a Dubai-based financial service firm has pointed out a "catch-22 situation" that exists in the Gulf region. Under the existing SEBI regulations, Indian brokers are allowed to set up trading platform overseas only under a 100 per cent owned entity, while the Gulf countries in turn do not allow 100 per cent foreign ownership for broking firms. Such ventures are allowed only in partnership with a local entity holding majority stake.

The matter assumes significance as the Gulf is probably the only region in the world where NRIs are looking to invest in Indian shares. NRIs in North America and Europe may not show the same levels of interest in trading on the Indian markets on a regular basis. NRIs in the Gulf, being closer still consider India as home and are comfortable investing here, the firm has pointed out. Accordingly, it has sought permission for direct trading facility, for NRIs, in shares of Indian companies. Currently, these NRIs have to go through broking firms in India to buy or sell shares.

In 2003-04, NRI remittance to India amounted to $22 billion (more than twice the incremental FII investment during 04) of which 75 per cent came from the Middle East countries. The Gulf States have in place a satisfactory regulatory framework for entities in the financial services sector and strict action is taken against violators of law, the memorandum said.
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