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Tuesday, May 30, 2006

India witnesses over $1.2 b foreign funds outflow

Any bubble in India stock market? What's risks for Indian economy?
1. High budget deficit. It is almost 80% of its GDP and still growing fast.
2. High trade deficit. Almost $40 billion in 2005. It is huge comaring with about $100 billion export.
3. High oil price
4. Inequal development.
5. Highly depends on FII for investment.
6. Overvalued currency.

Mumbai: India and Korea bore the major brunt of the recent sell-off by foreign funds in emerging markets. It is estimated that foreign funds pulled out about $5 billion last week from emerging markets with India alone witnessing an outflow of over $1.2 billion.

According to data filed with the Securities and Exchange Board of India, the total sell-off by foreign funds in the last eight trading sessions accounted for $2.5 billion (Rs 11,131 crore).

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