Indian bourses are likely to benefit from higher foreign fund flows as cracks appeared in the Chinese stock markets after the government tripled the tax on securities transactions to cool a rally.

Analysts say stable and well regulated markets such as India and Brazil could become more attractive for foreign investors, if China's stock markets, which are growing at a mammoth pace, fail to sustain the enormous growth witnessed over the last one year.

If the Chinese government does not succeed in cooling the overheating of its markets, global investors might migrate to other markets such as India, where investing would be a much safer option.

"It's hard to say whether a part of foreign investments going to China would come to India or any other market. Every investor is looking for better options to put his money and wants good returns on his investment," Sunil Garg, head of Asia ex-Japan equity research, JP Morgan, said.

Good investment opportunities exist in Asian markets, but global investors take long-term calls before investing in any country or changing their course of investments, he said.

The Chinese markets which grew nearly 130 per cent in 2006, have risen another 60 per cent this year. Most of the economists have criticised the growth of the Chinese markets, and said they were sitting on a bubble.

The markets on Wednesday went down by nearly seven per cent following the Chinese government's decision to triple the securities transaction tax.

Nearly 3,00,000 new investor accounts are being opened daily in China, with around 22 million new investors entering the markets this year, or four times the accounts opened in 2006, according to reports.

"Keeping a check over this situation will be a test for China's capitalistic face. The investors are getting into markets, more for the sake of earning a quick buck than investing into the growth story.

"If the government's attempt fails and there is a stock market crash, then it would be a big shock for the new age investors, who are inexperienced in equity investments," Tridib Pathak, chief investment officer, Lotus Mutual Fund, said.