Chanakya's_Chant
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India stood like a rock amid rout in emerging markets
MUMBAI: Indian markets have shown greater resilience than other emerging market economies when the US Federal Reserve decided to taper its bond-buying programme by another $10 billion, to $65 billion a month, beginning in February.
India witnessed outflows of just $316 million in February so far, compared with Taiwan's $2.4 billion, South Korea's $1.2 billion, and Thailand's $493 million, according to Bloomberg data.
Investment managers attributed this to India's better grip over some of its critical macro-economic parameters such as its twin deficits -- current account and fiscal. The rupee has also been stable amid the rout in emerging markets, and, inflation measured by consumer prices, declined to two-year low of 8.79% in January.
Besides, fund managers are optimistic that governance will improve once the elections are over. What's also worked to India's favour is the sudden slowdown in China.
India witnessed outflows of just $316 million in February so far, compared with Taiwan's $2.4 billion, South Korea's $1.2 billion, and Thailand's $493 million, according to Bloomberg data.
Investment managers attributed this to India's better grip over some of its critical macro-economic parameters such as its twin deficits -- current account and fiscal. The rupee has also been stable amid the rout in emerging markets, and, inflation measured by consumer prices, declined to two-year low of 8.79% in January.
Besides, fund managers are optimistic that governance will improve once the elections are over. What's also worked to India's favour is the sudden slowdown in China.
The $1.7-trillion global stock market rout has left India relatively unscathed. Reflecting the resilience, the BSE Sensex remained almost unchanged so far this month, closing at 6084 on Wednesday.
"India's current account deficit (CAD) numbers are strong compared to other emerging markets. Moreover, inflation is in a corrective mode. All these factors make India an attractive investment destination," said Gopal Agrawal, chief investment officer at Mirae Asset Global Investments.
Economists expect CAD to ease to around 2% of GDP in FY14, from a record high of 4.8% in FY13. The currency has appreciated almost 10% to 62.15 on Wednesday from a record low of 68.82 in August, endorsing the stability of the Indian economy. Inflation measured by consumer prices declined to 2-year low of 8.79% in January.
"Indian markets are likely to perform better than most other emerging markets this year. The easing current account deficit, falling inflation numbers are seen as positives for economic recovery. Moreover, there are strong expectations that a pro-reform, pro-growth government will come to power this year," said Mahesh Patil, co-chief investment officer at Birla Sun Life Asset Asset Management, which manages assets worth about Rs Rs 85,000 crore.
According to fund managers, the recovery of the US economy augurs well for emerging market economies like India as it benefits from higher exports of goods and services. Moreover, with slowdown in China, India has become an attractive destination for foreign investors.
"India is relatively well placed to withstand the pressure in emerging markets. Forex reserves have been bolstered by various measures of the Reserve Bank of India. The reduction in current account deficit points towards comfortable economic fundamentals," said Santosh Kamath, CIO - Fixed Income, Franklin Templeton Investments, which manages assets worth Rs Rs 45,000 crore.
"India's current account deficit (CAD) numbers are strong compared to other emerging markets. Moreover, inflation is in a corrective mode. All these factors make India an attractive investment destination," said Gopal Agrawal, chief investment officer at Mirae Asset Global Investments.
Economists expect CAD to ease to around 2% of GDP in FY14, from a record high of 4.8% in FY13. The currency has appreciated almost 10% to 62.15 on Wednesday from a record low of 68.82 in August, endorsing the stability of the Indian economy. Inflation measured by consumer prices declined to 2-year low of 8.79% in January.
"Indian markets are likely to perform better than most other emerging markets this year. The easing current account deficit, falling inflation numbers are seen as positives for economic recovery. Moreover, there are strong expectations that a pro-reform, pro-growth government will come to power this year," said Mahesh Patil, co-chief investment officer at Birla Sun Life Asset Asset Management, which manages assets worth about Rs Rs 85,000 crore.
According to fund managers, the recovery of the US economy augurs well for emerging market economies like India as it benefits from higher exports of goods and services. Moreover, with slowdown in China, India has become an attractive destination for foreign investors.
"India is relatively well placed to withstand the pressure in emerging markets. Forex reserves have been bolstered by various measures of the Reserve Bank of India. The reduction in current account deficit points towards comfortable economic fundamentals," said Santosh Kamath, CIO - Fixed Income, Franklin Templeton Investments, which manages assets worth Rs Rs 45,000 crore.
,hope da economy remains stable throughout FY14 
MTF i think 
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