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Reuters
6 days ago
- Business
- Reuters
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)
Yahoo
6 days ago
- Business
- Yahoo
India's index-linked bonds see record foreign selling in May on profit-booking, currency swings
By Dharamraj Dhutia MUMBAI (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)
Economic Times
6 days ago
- Business
- Economic Times
India's index-linked bonds see record foreign selling in May on profit-booking, currency swings
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. ADVERTISEMENT 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. ADVERTISEMENT 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. ADVERTISEMENT "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) ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
6 days ago
- Business
- Time of India
India's index-linked bonds see record foreign selling in May on profit-booking, currency swings
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. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Markets 1. India bond yields resume decline as all eyes on RBI decision this week 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 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 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 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 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)
Time of India
18-05-2025
- Business
- Time of India
Foreign investors pour Rs 18,620 crore into Indian equities in May on renewed confidence
Foreign investors have continued showing confidence in India's equity markets, pumping Rs 18,620 crore so far this month. The sharp uptick comes on the back of Rs 4,223 crore of inflows in April, marking a strong reversal after three months of heavy selling. In the first three months of 2025, foreign portfolio investors (FPIs) had withdrawn a total of Rs 1.16 lakh crore, with January alone seeing an outflow of Rs 78,027 crore. This turnaround is being driven by a mix of global stability and improving domestic fundamentals. 'A key catalyst was the announcement of a ceasefire between India and Pakistan, which eased regional tensions and lifted investor sentiment,' said Himanshu Srivastava, associate director – manager research, Morningstar Investment. He also pointed to a temporary truce between the US and China on tariffs, which has helped improve risk appetite among global investors. 'With the global trade scenario improving after the pause in trade war between the US and China and the end of the India-Pakistan conflict, the investment scenario has improved,' added VK Vijayakumar, chief investment strategist at Geojit Financial Services. FPIs are likely to continue their buying interest in India, and therefore, large caps will be resilient, Vijayakumar added. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Perdagangkan CFD Emas dengan Broker Tepercaya IC Markets Mendaftar Undo India's strong macroeconomic outlook, supportive monetary policy, and expectations of healthy corporate earnings have also boosted the case for equities. However, the bond market continues to see mixed interest as FPIs pulled out Rs 6,748 crore from the debt general limit while investing Rs 1,193 crore in the voluntary retention during the period reviewed. In an attempt to revive activity in the bond market, the Securities and Exchange Board of India (Sebi) last week floated a consultation paper proposing waivers and relaxations for FPIs investing in Indian government securities via the VRR and the Fully Accessible Route (FAR). Manoj Purohit, Partner & Leader, Financial Services Tax at BDO India, noted that the proposal comes at a crucial juncture, with foreign investors still treading cautiously in the Indian bond market despite the recent inclusion of government securities in global bond indices. So far, till May 16, 2025 FPIs have made a net outflow of Rs 93,731 crore across all segments, though recent trends suggest a possible return to steady inflows, at least in equities. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
