Testing time for bulls this week

While value buying emerged in the blue chips, an expected cut in the US interest rates and fresh banking sector reforms helped the market regain some of its recent losses.

The trend in the US interest rates are crucial for markets across the globe, including India. Foreign funds 8212; mostly from the US 8212; have put in huge money in the emerging markets like India in the last couple of years as US interest rates have remained extremely low.

However, with recent hikes in the US interest rates, there has been a significant reversal in foreign fund flows to the emerging markets.

Foreign funds flows to India have been erratic of late. But Thursday8217;s inflow of Rs 123.30 crore resulted in the FII inflows remaining positive at Rs 69.90 crore for the first four days of the week.

The easing of oil prices will boost the sentiment. But the rising inflation level will neutralise this impact.