Profile image
By ETF Daily News (Reporter)
Contributor profile | More stories
Story Views

Last Hour:
Last 24 Hours:

Could A Rate Cut Turn India-Focused ETFs Around?

Tuesday, November 22, 2016 5:49
% of readers think this story is Fact. Add your two cents.

From Zacks: Chances of another rate cut by India’s central bank Reserve Bank of India (RBI) increased significantly as retail inflation eased for a third straight month in October.

As per government data, consumer prices were up around 4.2% on an annual basis. This is the slowest rise in the last 14 months and was in line with the median consensus in a Reuters’ poll of economists.

In October, a six-member monetary policy committee (MPC) headed by the governor of Reserve Bank of India, (RBI) Urjit Patel decided to cut the repo rate in order to boost the Indian economy. This was the first time that the newly formed MPC decided on the monetary policy, which also issued a favorable inflation and economic growth outlook. The RBI MPC is due to review rates on December 6 and 7 (read: 4 India ETFs to Buy as RBI Cuts Rate).

Lately, India has been in the news lately, thanks to the demonetization move by Indian Prime Minister Narendra Modi. In order to tackle tax evasion, illegal money, fake currency and corruption, high-denomination bank notes of INR500 and INR1000 were withdrawn. The step is expected to have deflationary impact on inflation and remove unaccounted and untaxed money, thus making it easier for RBI to meet its medium-term inflation target of 4%.

As a result, India ETFs like iShares India 50 (INDYFree Report) , iShares MSCI India (INDAFree Report) , WisdomTree India Earnings Fund (EPIFree Report) and PowerShares India Portfolio ETF (PINFree Report) could be on investors’ radar in the upcoming weeks (read: India ETFs Tangled Between Note Demonetization & Trump Win)

Small-cap stocks are generally more susceptible to changes in domestic economy. EGShares India Small Cap ETF (SCINFree Report) , VanEck Vectors India Small-Cap Index ETF (SCIFFree Report) and iShares MSCI India Small-Cap ETF (SMINFree Report) are some of the ETFs tracking small-cap companies based in India.

However, Donald Trump’s win in the U.S. is likely to cause uncertainty in the coming days in a few foreign economies. India might also be at the receiving end of Trump’s restrictive policies, particularly related to immigration and outsourcing (read: Foreign ETFs to Win or Lose on Trump Victory).

Trump plans to levy higher taxes on companies for outsourcing jobs to places like India. As per India’s central bank, India exported software services constituted $50 billion worth of exports to North America. As a result uncertainty looms large for India (see all Asia-Pacific Emerging ETFs here).

This article is brought to you courtesy of Zacks Research.

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (


We encourage you to Share our Reports, Analyses, Breaking News and Videos. Simply Click your Favorite Social Media Button and Share.

Report abuse


Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories



Top Global


Top Alternative




Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.