Indian Government Bonds: Billions of dollars of foreign investment can come in Indian Government bonds from June 2024. JPMorgan Chase has decided to include its Indian government bonds in the benchmark emerging-market index. From June 28, 2024, JPMorgan will include government bonds of the Government of India in the Government Bond Index-Emerging Market. India’s government bonds will have 10 percent weightage in this index. With this decision of JP Morgan, according to an estimate, there is a possibility of investment of 25 billion dollars in the debt market of the country.
Rupee strengthens, banking stocks rise
Due to this decision of JP Morgan, the rupee opened with great strength against the dollar in the currency market in the morning. The rupee opened 29 paise stronger at Rs 82.82 against one dollar. At the same time, there has been a strong rise in the banking stocks in the stock market, especially in the shares of public sector banks.
Impact of increasing confidence on India
On the inclusion of India’s government bonds in the benchmark emerging-market index, Economic Affairs Secretary Ajay Seth said that this is a welcome decision which shows confidence in the Indian economy. Chief Economic Advisor V Ananth Nageswaran also welcomed the decision and said that JP Morgan itself has taken this decision. This reflects the confidence of financial market participants and financial markets in India’s potential and growth prospects and its macroeconomic and fiscal policies. Just as long term investors have benefited from investing in Indian equity markets, similarly long term investors in Government of India bonds will also benefit.
Rating agency will change its view
On the inclusion of India in the JP Morgan Emerging Bond Index, Kotak Mahindra AMC MD Nilesh Shah said, inclusion of India in the bond index is a decision taken in the right direction. Due to Russia’s exit from the index and problems in China, options for investors investing in the debt market have become limited. He respected the investors’ decision and told the rating agency that they would leave their Moody’s and Poor’s standards. Nilesh Shah said that this decision will strengthen India’s bond market.
Government bonds will attract investors
According to Bloomberg data, foreign investors have invested $3.5 billion in India’s government bonds this year. Foreign investors have emerged as big investors in the Indian stock market. But now the government bonds of the Government of India will also attract investors.
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