BOMBAY, June 5 : Foreign investors are expected to increase their investments on Indian stock markets in the fiscal year to March 31, analysts and stock brokers said on Thursday, reports AFP.

Investors were showing renewed interest in India's recovering economy and their disenchantment with depressed interest rates in the United States, they said.

Analyst Devesh Kumar at Daewoo Finance said overseas investments on the Indian stock exchanges were likely to rise 26 per cent from the previous year to three billion dollars in the current fiscal year.

Investments in May. the second month of the current fiscal year, were up 37 per cent in to 204 million dollars over the previous month.

This indicated investors' growing confidence in India, despite an economic slowdown ana political uncertainty through most of last year. Kumar said.

Foreign institutional investors put in 2.37 billion dollars on Indian bourses in fiscal to March 31, marking a 20 per cent rise over the previous year.

The fiscal year ended March 31 saw an economic slowdown brought on by a cash-crunch, high interest rates and general elections that produced a frac- tured parliament which led to the country having three governments.

Stock Broker Gaurav Sanghvi said the current year was likely to see more money flowing into stock markets of emerging economies, and India would get a "good slice of these investments.”

Some 400 foreign institutional Investors, mainly pension and mutual funds, have put in about eight billion dollars on the Indian bourses since September 1992 when Delhi opened the capital market to overcome a severe payments crisis.