Following JPMorgan Chase & Co.’s announcement that it will be including Indian government bonds in its benchmark emerging-market index, the value of the Indian rupee and 10-year bonds both increased on September 22.
The local currency was up 0.26 percent from its previous close of 83.09 at 9.10 a.m. Opening prices for the local currency were 82.83.
“This strong momentum is projected to extend to the onshore market, with a potential advance towards 82.50 in the next sessions once 82.80 levels are cleared. In light of the aggressive RBI intervention, the upside is anticipated to be constrained to the area between 83.25 and 83.30, according to CR Forex’s most recent analysis.
The 10-year bond yield decreased by 6 basis points from its previous close of 7.163 percent to reach a two-month low of 7.101 percent. Prices and bond yield move in opposite ways.
Beginning on June 28, 2024, JPMorgan Chase & Co. will include Indian government bonds in its benchmark emerging-market index (GBI-EM). As India’s weight in the index is capped at 10% and the total market value of qualifying Government bonds is $330 billion, this decision has significant ramifications for the Indian debt market and for international investors, according to analysts. Potential flows might reach $30 billion, according to HSBC.
“India being included in the bond index is a positive development. The alternatives for international debt investors have shrunk with the elimination of Russia and issues in China. Hopefully, rating agencies will acknowledge the perspective of investors and abandon their erratic and lax criteria. The bond market in India would expand as a result of this inclusion, according to Nilesh Shah, Managing Director of Kotak Mahindra AMC.
Global stocks and bonds were under pressure as investors braced themselves for the likelihood of sustained increases in US interest rates. They speculated on Governor Kazuo Ueda’s remarks suggesting prospective changes in the Bank of Japan’s ultra-easy monetary policy amid persistent above-target inflation and kept an eye out for any potential shifts.
as the U.S. Fed’s hawkish remarks, crude oil prices first fell, but they later recovered at lower levels as Russia temporarily banned the export of distillate and diesel fuels to balance its local fuel market.
The value of Asian currencies was rising. The Malaysian ringgit increased by 0.11 percent, the South Korean won increased by 0.3%, the Chinese offshore spot gained 0.2 percent, the Philippines peso increased by 0.4%, and the Singapore dollar increased by 0.4%. Thai Baht decreased 0.16 percent, and the Japanese yen sank 0.34 percent.
The dollar index, which gauges the strength of the US dollar versus other major currencies, was up 0.12% from its previous closing of 105.36 to 105.48.
