Indian shares seen rising cautiously

Indian shares are seen trending upwards this week after a fortnight of weakness, with the end of a spate of government equity issues that has been drawing off demand, traders said.
But huge gains are unlikely until national elections slated for April-May are out of the way, they said.
The 30-issue Bombay Stock Exchange index has lost 7.4 percent in the past two weeks and is down nearly 13 percent from the year's high of 6,249.6, hit in January.
"Most of the year-end fund needs are out of the way and investors should come back to the market over the next few weeks," said Devesh Kumar, head of equities at ICICI Securities.
Investor attention had also been trained on share issuance's from the government and some privately held firms in recent weeks. Most of the issues, which have raised more than $3 billion, have been well oversubscribed, and dealers expect focus to now return to the stock market.
Kumar said the forthcoming reporting season should provide a trigger to the market.
"The tech sector should look up. People are now betting on improved guidance from the front-line tech companies and that could lift these stocks," he said.
"In the short-term, the market could trade between 5,400 and 5,700."
Foreign funds have continued to pour money into India. They have invested $1.6 billion in Indian shares so far in 2004, following net investment of $6.7 billion last year.
An official of the Securities and Exchange Board of India told Reuters late on Friday that the capital markets regulator was considering whether to allow hedge funds to invest directly in local markets.
Such funds, which are showing strong interest in India due to its booming economy, can invest in India only through participatory notes, which are derivative instruments representing underlying shares.
"Some caution is likely in the run-up to elections but there will be pockets of opportunities which investors will tap," said Ritesh Sheth, an investment analyst with ASK Raymond James Securities. He said automobile stocks were likely to be in focus as vehicle sales were expected to strong at least until the first half of the next financial year beginning April.
But he said metal stocks may see profit-taking as commodity prices are nearly at their peaks.