Indian shares are seen rangebound next week after a volatile week of trading with dealers expecting overseas fund flows to slow. The markets saw fresh buying towards the end of the week from overseas funds in software, automobile and infrastructure stocks.
Analysts were confident that India's growth was on track after data showed industrial output grew 8.3 percent in January from a year earlier. Asia's third-largest economy is forecast to grow by 8.1 percent this fiscal year ending in March, with the government aiming to achieve 10 percent growth in the next few years.
The Indian markets lost over two percent mid-week after foreign funds sold heavily in the futures market, but recovered to close the week higher. Automobiles, cement and engineering stocks are seen as medium-term beneficiaries through recent union budget measures.
The Mumbai stock exchange's 30-share benchmark Sensex closed Friday at 10,765.16, up 169.73 points or 1.6 percent from the previous week's close of 10,595.43.
The markets have risen 14.5 percent since January on overseas fund flows into Indian stocks worth 3.21 billion dollars in the new year.
Foreign funds invested 10.7 billion dollars in 2005.
Leading global investment banks like Credit Lyonnais and JM Morgan Stanley have cautioned investors to be wary about the sharp run-up in the Indian markets in recent months.
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