Bond Market Outlook
Foreign portfolio investors continue selling consistently in both debt and equity markets over the past 15 days, amounting to a total outflow of USD 2.3 billion (equity plus bonds).
A significant part of these outflows can be attributed to weakness in the local currency and a surge in U.S. yields as investors have their rate cut expectations dampened. However, market experts feel the weakness doesn’t matter as much as to sustain outflows.
Despite surge in foreign investor selling in Indian government bonds this month, the highest monthly sales since the Covid-19 pandemic, market experts quoted by Moneycontrol feel it is only an aberration, with inflows likely to follow in the coming months.
Experts feel the current outflow will continue marginally, till the market stabilises after the inclusion of Indian bonds in JPMorgan bond index in June. Marginal outflow may continue till then, due to absence of compelling…
