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India opens stock markets to foreigners

Move allows individuals to trade in Indian markets
India stock exchangeEnlarge
India opened its stock markets to investments from foreign individuals in a bid to generate inflows. (MANAN VATSYAYANA/AFP/Getty Images)

India will open its stock market to individual foreign investors this month, in a move designed to boost demand and liquidity, the BBC reports.

Previously, foreign investors could only trade in Indian stocks through investing in mutual funds.

Before you get too excited, bear in mind that the Sensex dropped about 25 percent last year, marking its first annual drop in three years.

Moreover, various analysts suggest that the short-term outlook is bleak, though Mark Mobius, for one, says India and Asia in general present good prospects within a five-year window.

Perhaps the biggest risk is a pullout of European capital, as loans from Eurozone banks reportedly account for as much as 15 percent of India's GDP, according to today's Indian Express.

http://www.globalpost.com/dispatches/globalpost-blogs/the-rice-bowl/india-opens-stock-markets-foreigners