BOMBAY. Mar 2: Foreign Investors here gave the thumbs-up Tuesday to the fiscal 1994-95 budget unveiled by Fiance Minister Manmohan Singh and said it kept India solidly on the path of economic reform, reports AFP.

Navtnder Sahni of brokerage Marlin Partners UK said the budget released on Monday had sent positive signals- to foreign institutional Investors and foreign firms seeking to take advantage of the opening of the Indian economy.

"We would advise investors to stay on course”, he said. The budget is growth-friendly. Input costs for most forms will go down. We are heading towards a lower cost India."

The initial reaction of the Bombay Stock Exchange, the nation's largest, was negative, however, as the barometer sensitive index lost 136 points during the first foil day of postbudget trading got cfose at 4150.15 points.

Broker Ajit Ambani -said much of the selling was by local profit-takers and the bulls would return to the market.

"The ill-Informed are selling In panic while others are waiting cautiously to- get a clearer idea of the budget." he said.

Pankaj Tahvar of WI Carr (Far East) said the budget for the fiscal year beginning April 1 was foreign investor-friendly although "obviously all expectations have not been met.” He added: there were too many expectations.

Talwar said cuts In Import duties and domestic tariffs would help, industry substantially.

Turning to the stock market. he said automobiles, consumer goods, paints and toiletries looked like attractive buys.

"But 1 am very bullish on shares of computer hardware and software firms. The duty

cuts here are significant", he said.

Srl Shankar of Hoare Govctt Asia said foreign Institutional investors were disappointed that the 10 per cent capital gains tax on portfolio Investments was retained.

"We were expecting It to be brought down to zero as in countries like South Korea and Malaysia," he said.

But, he added, "there has been no slackening" of the economic reforms begun in June 1991 by the government of Prime Minister PV Naraslmha Rao.

The good thing is (Finance Minister Singh) Is going about making domestic Industry competitive.

"With a good monsoon and excellent industrial growth things should look up. The budget is particularly good to Industry." Shankar said.

Pravin Shah of Smith Ncwcourt said he did not expect any change In investment

patterns on the Indian Stock Exchanges.

Substantial money has already been earmarked for investment here. This trend will continue as the budget Is broadly pro-reform, he said.

More than 130 foreign institutional Investors, mostly pension and mutual funds, have been licensed to invest on Indian Stock exchanges since September 1992, when New Delhi opened up the bourses as part of its liberalisation.

Foreign institutional Investors brought In some one billion dollars to the Indian bourses in 1993, well In excess of expercations. The amount is expected to double tn 1994.

Foreign investment projects worth nearly three billion dol- , lars ।were approved by the Indian government last year with US firms pledging more money in 1993 alone than in the 45 years since India's in-dependence from Britain.