Once hot favourite, India bonds lose their charm for foreign investors
With only three trading sessions left in March, foreign investors have sold a net $1.12 billion in Indian debt, the strongest monthly outflow since December 2016, and are now on the verge of turning net sellers for the year so far. Overseas investors had previously proven remarkably resilient, helping support debt markets at a time when tumbling bond prices had spooked domestic players, with the benchmark 10-year yield up around 110 basis points since the end of July
Indian bonds: A near 2 percent fall in the rupee this year is now starting to erode returns for foreign investors at a time when emerging markets continue to lose favour as rising US interest rates narrow the yield differentials. Image source: Reuters