India's index-linked bonds see record foreign selling in May on profit-booking, currency swings
MUMBAI, June 2 (Reuters) - Foreign investors sold Indian government bonds included in global indexes for a second straight month in May, driven by profit-taking and currency volatility rather than a change in sentiment towards the country, several investors said.
Foreign investors offloaded 123.2 billion rupees ($1.44 billion) of Indian bonds under the Fully Accessible Route in May, the highest since its 2020 launch, after selling 111.4 billion rupees in April.
They have invested 1.20 trillion rupees in Indian bonds till March since June 2024, when Indian bonds were included in the JPMorgan emerging debt market index.
"The recent outflows are best viewed through the lens of profit-taking after a strong run, rather than a shift in fundamental conviction," said Rong Ren Goh, portfolio manager at Eastspring Investments, which manages $256 billion of assets.
Some headwinds, including geopolitical tensions and uncertainty over the new RBI governor's stance on FX policy, may have also led investors to trim exposure and rebalance portfolios, he added.
The Indian rupee has grown more volatile over the past six months since new RBI Governor Sanjay Malhotra took charge in December, with implied volatility averaging 4.26%, up from 2.24% during the final six months of former governor Shaktikanta Das's tenure.
A rise in U.S. Treasury yields due to fear of a wide budget gap and inflationary impact of President Donald Trump's tariff policies and a drop in Indian rate due to declining inflation have also narrowed the yield differential between the two markets.
The spread between Indian and U.S. bond yields have collapsed to 21-year low of around 170 bps now, from 250 bps early November.
"This (selling in Indian bonds) was not driven by skepticism towards India, but rather by shifts in global macro sentiment," Jean‑Charles Sambor, head of emerging markets debt at TT International Asset Management said, that manages $3.15 billion of assets across EM.
"We do not see this (outflows) as a game changer. Sentiment towards Indian bonds is likely to improve as inflation continues to decline and there is more fiscal space," Sambor said, adding he remains constructive on rupee bonds and believes appetite for local currency bonds is returning.
($1 = 85.3790 Indian rupees)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Scottish Sun
an hour ago
- Scottish Sun
Israel issues warning to Greta Thunberg's so-called Freedom Flotilla as eco-pest aims to SAIL to terror hotbed Gaza
They are only carrying a 'symbolic' amount of aid STUNT THREAT Israel issues warning to Greta Thunberg's so-called Freedom Flotilla as eco-pest aims to SAIL to terror hotbed Gaza ISRAEL has issued a warning to Greta Thunberg's so-called Freedom Flotilla as the climate activist aims to sail into Gaza. The Swede is pulling the dangerous stunt after leaving from Catania, Italy, on Sunday aboard the Madleen. Advertisement 6 Greta Thunberg sits aboard the aid ship Madleen during the stunt Credit: Reuters 6 Thunberg speaking ahead of the dangerous stunt 6 Thunberg and the Madleen are currently south of Greece Credit: AP The boat, carrying 11 pro-Palestine protesters, is currently south of Crete and is aiming directly for the terror hotbed with only a "symbolic" amount of aid. The young campaigners say they are hoping to 'break the siege' and raise 'international awareness' of the humanitarian crisis on the Gaza Strip. Thunberg, 22, has posted on social media with a Palestine flag and wearing a keffiyeh scarf while on the pointless journey. Israel is prepared to raid the ship, IDF spokesman Brigadier General Effie Defrin said. Advertisement He said: "We have gained experience in recent years, and we will act accordingly." One activist on board has said they are being followed by a drone - a month after another boat under the same flag was allegedly attacked by one. In a video on social media, one of Greta's shipmates said: 'We can clearly see a drone to our left. It's gaining on us a little bit." Organisers of the Freedom Flotilla Coalition say their voyage is 'a non-violent, direct action to challenge Israel's illegal siege". Advertisement Ahead of the journey, Thunberg said through tears: "we are doing this because, no matter what odds we are against, we have to keep trying. "Because the moment we stop trying is when we lose our humanity. Death of Hamas chief Mohammad Sinwar could cause DECIMATED terror group to implode "And no matter how dangerous this mission is, it's not even near as dangerous as the silence of the entire world in the face of the live-streamed genocide." Israel rejects any accusation it is conducting a genocide and says the accusations are an anti-Semitic 'blood libel'. Advertisement Israel is, instead, aiming to wipe out the terror group Hamas which conducted the bloody October 7, 2023, massacre killing 1,200 people and taking 250 hostage. Hamas is accused of using innocent Palestinian civilians as shields and holding aid meant for them to ransom. 6 Gaza has been hammered by the IDF as it aims to wipe out Hamas Credit: Getty 6 Displaced people are seen near temporary shelters in Gaza Credit: Shutterstock Editorial Advertisement 6 The crew aboard the Madleen Credit: Reuters US Senator Lindsey Graham has slammed the flotilla saying: "Hope Greta and her friends can swim!" Negotiations are ongoing to find peace in the strip, with Israel last week signing up to a US proposal. Israel has paused aid delivery after soldiers opened fire on people heading toward an aid site. Advertisement Gaza health officials, the Red Cross and the U.N. rights office said 27 people were killed on Tuesday, and witnesses blamed Israeli forces. Israels military said it fired near people it described as suspects who it said approached its forces and ignored warning shots. It says it is looking into reports of casualties. The UN has warned that Gaza had become 'the hungriest place on Earth'. Advertisement It said the territory's entire population was at risk of famine. It comes after Israel eliminated defacto Hamas Gaza chief Mohammad Sinwar, also known as "The Shadow". It comes after reports that the chief, who was also one of the October 7 masterminds, had likely been killed in an Israeli airstrike on May 13. Israel appears to have successfully eliminated Sinwar Jr by bombing what it said was Hamas' command centre under the European Hospital in the southern Gaza Strip. Advertisement
Daily Mail
an hour ago
- Daily Mail
Succession battle erupts at America's biggest bank as young bucks jostle to replace Jamie Dimon
JPMorgan Chase is making moves behind the scenes to eventually replace its longtime CEO Jamie Dimon, who is expected to retire within five years. Dimon, 69, indicated in a Monday interview with Fox Business that he intends to step away from America's largest consumer bank in 'several years,' adding that he loves the job. On Tuesday, Bloomberg reported that JPMorgan put Marianne Lake in charge of strategic growth and the firm's international consumer bank. Lake, 56, is one of the leading contenders to replace Dimon when the time comes, and her promotion suggests that she may be first in line. Lake took over from Sanoke Viswanathan, 50, who left to become the CEO of data company FactSet. She's now the head of JPMorgan's consumer and community banking division, which serves 84 million customers in the US. Doug Petno and Troy Rohrbaugh, who together lead JPMorgan's commercial and investment banking operations, are also vying for the top job. What Petno has going for him is his length of service. He's been at the bank for 35 years and has held numerous roles at the company. By comparison, Lake has been at JPMorgan for 25 years, while Rohrbaugh has been there for 20 years. Jenn Piepszak was a real possibility to become CEO several months ago. She effectively took herself out of the running when she accepted the COO job in January. Piepszak replaced former COO Daniel Pinto, who will serve as the company's president until he retires in 2026. Pinto, too, was once considered someone who could step into the CEO role, as he previously assumed those responsibilities when Dimon had to undergo emergency heart surgery in 2020. Mary Erdoes, CEO of asset and wealth management, is considered a dark horse in the leadership race. She has been at the firm for nearly 30 years. JPMorgan could surprise everyone and go with an outside hire, but that is very unlikely. Daily Mail reached out to the bank for comment. In April, the bank's Board of Directors identified potential successors to Dimon and all of them were internal candidates. Dimon himself was an internal hire. In 2000, he became the CEO of Bank One, overseeing that firm's operations until it merged with JPMorgan in 2004. He was first selected to be COO at JPMorgan before being hired as CEO in December 2005. All this jockeying at JPMorgan comes as Dimon made a headline-grabbing appearance Friday at the inaugural Regan National Economic Forum, where he talked with his usual brash candor about today's hot-button political issues. On a panel with CNBC's Morgan Brennan, he sounded the alarm about the ballooning national debt and warned that if the United States doesn't take its role as the world's sole superpower seriously, the US dollar could cease being the world reserve currency. He also advanced the idea that leaders at every level of government are bungling the country's future. 'The amount of mismanagement is extraordinary - by state, by city, for pensions, and that stuff is going to kill us,' he said. All these statements and more got Brennan to ask Dimon whether he'd consider running for office, a question that got many in the audience to gasp. 'What would be the scenario that you would entertain to consider public service?' she asked. Dimon paused for a beat, then said, 'Alright, ready? I'll tell you. If I thought I could really win, which I don't think I could.' That response apparently caught the eye of Jeffrey Sonnenfeld, a professor at the Yale School of Management, who wrote a lengthy article about why Dimon could be a dynamic choice to be the next president. Anthony Scaramucci, a financier who served as White House communications director for 10 days in 2017 before being fired by Trump, posted about Sonnenfeld's Tuesday piece in Fortune Magazine, calling it 'spot on.' Sonnenfeld argued that Dimon is a commanding presence and a sensible moderate who could, if he decided to run as a Democrat, unite a party that is in complete disarray. The conventional wisdom is that the Democrats are largely without a true leader after Vice President Kamala Harris lost to Donald Trump in November. A CNN/Gallup poll released on Sunday seems to bear that out, with just 16 percent of Americans believing the Democratic party has strong leaders. Sonnenfeld also cast Dimon as an unapologetic truth-teller even when it doesn't suit him, writing that this is a 'rare quality found only in the best leaders.' As an example, he pointed to a leaked recording of Dimon at a company town hall, where he launched into a foul-mouthed rant against employees who wanted to continue working from home. Dimon also has a realistic claim to the centrist label, Sonnenfeld wrote, as he criticized both Democrats and Republicans. Although Dimon, a registered Democrat, continues to praise Trump for growing the economy in his first term, he hasn't been shy to slam the president for his Liberation Day tariffs and his decision to establish a strategic bitcoin reserve. In January 2024, he was far more conciliatory, saying, 'Take a step back, be honest. He was kind of right about NATO, kind of right on immigration. He grew the economy quite well. Trade tax reform worked. He was right about some of China.' Back then, he was warning that Democrats' incendiary rhetoric about Trump and MAGA could cost them the upcoming election. Whether or not the Democrats' approach to Trump supporters was the main factor in them losing, the fact is, Trump cruised to a second term relatively handily. Sonnenfeld wrote that Dimon could be the antidote to Trumpism, essentially saying that while Trump plays the role of a titan of industry, Dimon is the real deal. He pointed to Trump's multiple business bankruptcies, despite inheriting nearly half a billion from his father, Fred Trump. Meanwhile, JPMorgan stock has risen nearly 1,100 percent since Dimon became CEO. Adding to Dimon's potential as a leading political figure, he is not accustomed to having someone telling him what to do, very much like Trump. When speculation bubbled up last year that both the Harris and Trump campaigns were considering Dimon as Treasury Secretary, he had this to say: 'I've not had a boss in 25 years and I am not ready to start now.'
Reuters
2 hours ago
- Reuters
Prosecutors wrap up closing arguments in Harvey Weinstein sexual assault retrial
NEW YORK, June 3 (Reuters) - Prosecutors made their final pitch to jurors on Wednesday in the rape and sexual assault retrial of Harvey Weinstein, opens new tab, a day after the former movie mogul's lawyer said during his closing argument, opens new tab that the three alleged victims lied on the witness stand. Picking up where she left off during closing arguments on Tuesday, prosecutor Nicole Blumberg sought to weave together for the jury the accounts of the three women who testified that Weinstein had attacked them. "Members of the jury, he raped three women. They all said, 'no,'" Blumberg said. Weinstein, 73, is on trial for a second time after a New York state appeals court threw out his conviction in April 2024. Experiencing a litany of health problems, Weinstein was present in court on Wednesday in a wheelchair, wearing a dark suit and tie. He is accused of raping aspiring actress Jessica Mann in 2013 and assaulting the two other women in 2006 and 2002. The trial began in April. A lawyer for Weinstein on Wednesday twice moved for a mistrial based on comments by Blumberg during her arguments, but the motions were swiftly denied by state Supreme Court Justice Curtis Farber. Blumberg on Tuesday called Weinstein a serial predator who promised career advancement in Hollywood to women, only to then coax them into private settings where he attacked them. Weinstein, who has denied ever having non-consensual sex or assaulting anyone, has pleaded not guilty. "The defendant used his power and influence to create many, many award-winning movies," Blumberg said. "But he also used that same power, that same influence, to isolate women, trap women in places where he'd be alone with them and abuse them." Defense attorney Arthur Aidala on Tuesday accused the three alleged victims of lying on the witness stand out of spite after consensual sexual encounters with the Academy Award-winning producer failed to deliver them Hollywood stardom. "They are lying about what happened. Not about everything, but about a small slice - just enough to turn their regret, their buyers' remorse, into criminality," Aidala said of the accusers during his closing argument. Weinstein faces a maximum sentence of up to 29 years in prison if convicted on all changes. He already will likely spend the rest of his life in prison due to a 16-year prison sentence given to him after being found guilty in December 2022 of rape in California. He was convicted of rape by a jury in the previous trial in Manhattan in February 2020, but the New York Court of Appeals threw out the conviction and ordered a new trial, citing errors by the trial judge. Weinstein had been serving a 23-year sentence in a prison in upstate Rome, New York, when the conviction was overturned. That conviction was a milestone for the #MeToo movement, which encouraged women to come forward with allegations of sexual misconduct by powerful men. More than 100 women, including famous actresses, have accused Weinstein of misconduct. Weinstein has been held at New York City's Rikers Island jail since his conviction was overturned. He has experienced several health scares while being held at Rikers, and in September was rushed to a hospital for emergency heart surgery.
