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India now third best in Asia
By agencies
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Monday, 04 September 2006, 19:30 IST
MUMBAI:IndiaÂ’s ranking among emerging equity markets has seen a significant improvement over the past month, following the renewed upswing in stock prices since July 21, a leading business newspaper said.
According to the Economic Times, India is now the third best performer in Asia and the eighth best in the world, based on the Morgan Stanley Capital International (MSCI) indices, which track 27 emerging markets globally.
A portfolio of Indian shares modeled on the MSCI India index has delivered 20.2 percent dollar-denominated returns since the beginning of 2006. In rupee terms, the returns are higher at 24.2 percent due to devaluation of the currency against the dollar.
A month ago, India was the fourth best performer in Asia, behind China, Indonesia and the Philippines, and the twelfth best overall. In Asia, India continues to trail China and Indonesia, but has overtaken the Philippines, the Economic Times said.
The countryÂ’s latest ranking is close to the level in May, when Indian equities were at their peak. India, then, was the third best market in Asia and the seventh best overall. Indonesia retains the top spot in Asia with 36 percent returns, followed by China with 28 percent. From a month-on-month perspective, India has been the fastest mover in Asia, according to the paper.
The strong performance by Indian equities is fuelled by a fresh surge in FII inflows, along with easing concerns over rising interest rates across the globe and crude oil prices. In August alone, FIIs pumped in $1 billion into Indian equities at the net level, the highest in a single month since March, when they had pumped in $1.48 billion. Interest in emerging markets — BRIC countries in particular — has risen sharply over the past month.
Quoting a strategy note by brokerage house Enam Securities, the paper said unless oil and interest rates rise significantly, there no serious danger to the India story. It has also said a slowdown in the U.S. economy is likely to impact other emerging markets far more than India.